Palm cancels ill-advised Foleo, will take multi-million-dollar charge

September 4, 2007, 2:37 PM UTC
Fortune

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Palm (PALM) CEO Ed Colligan minutes ago announced that the company is canceling Foleo, a laptop-like device Palm announced just three months ago on May 30.

Foleo is being canceled, Colligan said, because the company needs to focus its software development efforts on its core smartphones, which compete with Research in Motion’s (RIMM) BlackBerry and Apple’s (AAPL) iPhone.

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Colligan wrote in a blog post:

In the course of the past several months, it has become clear that the
right path for Palm is to offer a single, consistent user experience
around this new platform design [smartphones] and a single focus for our platform
development efforts. To that end, and after careful deliberation, I
have decided to cancel the Foleo mobile companion product in its
current configuration and focus all of our energies on delivering out
next generation platform and the first smartphones that will bring this
platform to market. We will, of course, continue to develop products in
partnership with Microsoft (MSFT) on the Windows Mobile platform, but from our
internal platform development perspective, we will focus on only one.

I never wrote about Foleo, because I disliked the concept so much that I wouldn’t have had much nice to say. Most of my analysis of Palm this year has been sharply critical – I’ve said that the company’s future is in software, and it needs to get its act together in a hurry. (See this piece from last October.)

What’s unclear to me is why the Foleo announcement ever happened at all. A month before the iPhone launched and rocked the mobile computing world, Palm declared that it would come out with this odd distraction. Of course this was going to draw resources away from the smartphone business! How could it not?

This is bad because it shows that all this time, Palm’s leadership hasn’t really had its eye on the ball. One can only hope that the death (for now) of Foleo signals Palm’s new willingness to put first things first, and to deliver a first-class smartphone operating system.

After all, Apple and RIM aren’t sitting around twiddling their thumbs.