<http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2007/09/05/BUEFRUVD5.DTL&type=business>

Palm Inc.'s foray into a new category of laptop devices has died.

Chief Executive Officer Ed Colligan said Tuesday the Foleo, a
lightweight computing device meant to be paired with a smart phone,
is being canceled just three months after it was announced. Colligan
said the challenge of creating the Foleo alongside Palm's traditional
business of smart phones and personal digital assistants proved too
much for the Sunnyvale company.

"Foleo is based on (a) second platform and a separate development
environment, and we need to focus our efforts on one platform,"
Colligan wrote on the company's blog. "Our own evaluation and early
market feedback were telling us that we still have a number of
improvements to make Foleo a world-class product, and we cannot
afford to make those improvements on a platform that is not central
to our core focus."

Palm has been working on a new operating system for its Palm Treo
smart phone that would work with Linux, a flexible platform that
would allow better multitasking for Palm's handsets. Colligan said
the company will focus on delivering that platform before considering
a return to the Foleo. Palm will take a one-time charge of $10
million to cover the cost of the Foleo, he said.

The Foleo was the pet project of Palm founder Jeff Hawkins, who
proclaimed in May it was "the most exciting product I've worked on in
a long time." The device looked like a small laptop and was meant to
work in tandem with a smart phone, allowing users to easily check
e-mail and surf the Web. The company had originally said the device
would go on sale by the end of the summer.

But from the start, the Foleo was met with criticism from analysts
who questioned its appeal and its prospects for success. Jack Gold,
an analyst at J. Gold Associates and one of the early critics of the
Foleo, said the move to ax the device was necessary.

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