Foleo - A Sign Of Big Problems At Palm

Its rare for a non-product to consume so much of the oxygen around a company that its actual product line disappears into oblivion, but at Palm that's what's been happening for a rather long time.

Since around mid-2005 Jeff Hawkins has been pumping a mysterious third product line for Palm. We wondered what ground-breaking device this could be? After all Palm's existing products were rotting on the vine and its one major source of income, the Treo smartphone, was under increasing competition from all directions. It had to be something pretty impressive to drag much needed resources away from the core business. Especially as the company had undergone a chaotic restructuring/sell-off which appeared to leave it less able to compete than before.

Then Palm announced a Windows Mobile powered Treo. This had to be a sign. This new product line was so good that the company was even prepared to jump into bed with Microsoft, its erstwhile nemesis, throwing into stark contrast the shortcomings of its aging Palm OS based products.

Ed Colligan, the other half of Palm's Morecambe and Wise double act, even laughed off the launch of the iPhone saying "We've learned and struggled for a few years here figuring out how to make a decent phone" then added "PC guys are not going to just figure this out. They're not going to just walk in." This must be a company with some dynamite packed up its sleeves, we thought at the time.

Then, to a grand fanfare, Palm announced the Foleo. A product aimed at a niche of a niche. A product looking and sounding like a Psion/Teklogix NetBook half a decade late. A product, most of all, looking decidedly like a last, desperate throw of the dice.

Palm promised a September launch and trotted out a handful of developers who had been 'priviliged' to be allowed to develop the launch applications for the Foleo. Then as rumours spread that the Foleo was delayed Palm denied that this was the case.

Damn right it wasn't.

Palm wasn't delaying the Foleo at all, instead, just weeks before its expected launch, after at least 2 whole years in development, Palm has decided to cancel the Foleo completely.

Apparently overhyping and then launching the world's least saleable product wasn't making them look stupid enough, so they decided to go for the hat-trick and cancel it without selling any, at a cost of $10million. Proving that they didn't even have the courage of their convictions. Makes you wonder what they've been doing for 2 years doesn't it? And why the person who made the decision to kill the Foleo this week didn't stand up 2 years ago and say something then? Hopefully questions Palm's shareholders will be looking to get answered next time they have a little get together.

And, as an aside, that iPhone? Looks like since launch its outsold every single smartphone in the world. Put together. But I think I see Palm's problem here: Ed Colligan thinks the Treo is a decent phone. Now there's a guy who's never had to use one.

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