Palm Inc, whose shares have fallen 82 percent this year, will form a subsidiary for its operating system, separating the software business from the production of Palm handheld computers.
Palm licenses its software to Handspring Inc, Sony Corp and other companies that make competing electronic organizers. The company plans to form the subsidiary by the end of the year, Palm said in a news release distributed by PR Newswire.
The new structure could pave the way for an initial public offering of shares in the operating-system subsidiary, a move that Chief Executive Carl Yankowski has said is under consideration.
Such a move would remove conflicts that could arise because the company's rivals also are its customers.
"We're eager to foster the independence of both our businesses," Yankowski said in the statement.
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