Palm Abandons Foleo, Will Take $10 Million Charge

The Linux-based portable device that founder Jeff Hawkins dubbed "the best idea I've ever had" will never see the light of day.
Posted September 5, 2007

Larry Barrett

And so that's that.

Palm on Thursday unceremoniously concluded the brief and uninspiring Foleo era when CEO Ed Colligan announced on the company's blog that it was canceling production of the poorly thought-out mobile device.

Described as Palm's  first "smartphone companion," Foleo received less-than-enthusiastic reviews after it was introduced in May during the D: All Things Digital conference in San Diego.

What was supposed to be a sleek and easy-to-type companion to its flagship Treo smartphone turned out to be a costly mistake. Colligan said in his posting the company will absorb a $10 million charge related to the costs of designing and ultimately circular-filing the project.

"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…" he wrote in the posting. "To that end, and after careful deliberation, I have decided to cancel the Foleo mobile companion product in its current configuration and focus all our energies on delivering our next generation platform and the first smartphones that will bring this platform to market."

Palm founder Jeff Hawkins, who once called Foleo "the best idea I've ever had," viewed the device as a convenient alternative for mobile users who found using smartphones for e-mail too tedious and laborious. Foleo was originally scheduled to ship earlier this summer.

At the time Foleo was announced, Gartner analyst Todd Kort told that Palm "did a great job keeping it a secret but I'm not sure they did a sanity check to make sure this is what customers want—another device to carry around with your phone."

Foleo was to carry a suggested retail price of $499. The 2.5-pound device was to include a 10-inch screen, a standard-sized keyboard and a battery life of up to five hours. Built-in applications including e-mail, Web browsing and editors or viewers for commonly used business applications such as Word and Excel were promised.

Colligan said Palm is still working on Foleo II but remains primarily focused on getting the newest version of the Linux-based Palm OS to market.

As for that eight-figure hit to Palm's bottom line?

"This is a lot of money, but it is a small price relative to the costs that would be required to support two platforms going forward," Colligan wrote in the blog posting. "This decision is in the best interests of our customers, our team, our products and our shareholders."

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