A Message to Palm Customers, Partners and Developers

As many of you are aware, we are in the process of building our next generation software platform. We are very excited about how this is coming together. It has a modern flexible UI, instant performance, and an incredibly simple and elegant development environment. We are working hard on this platform and on the first smartphone that will take advantage of it.

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 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 our 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 on the Windows Mobile platform, but from our internal platform development perspective, we will focus on only one.

Because we were nearly at the point for shipping Foleo, this was a very tough decision. Yet I am convinced this is the right thing to do. Foleo is based on second platform and a separate development environment, and we need to focus our efforts on one platform. 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 can not afford to make those improvements on a platform that is not central to our core focus. That would not be right for our customers or for our developer community.

Jeff Hawkins and I still believe that the market category defined by Foleo has enormous potential. When we do Foleo II it will be based on our new platform, and we think it will deliver on the promise of this new category. We're not going to speculate now on timing for a next Foleo, we just know we need to get our core platform and smartphones done first.

I would like to thank our customers for their interest in Foleo. I know there will be disappointed folks who were looking forward to carrying a Foleo for all their mobile computing needs. I am certainly one of them. I would also like to thank the developers who have supported our Foleo efforts. They have been loyal to Palm and have worked hard to deliver some compelling solutions on the Foleo platform. I know that they will understand that the right thing to do for the long run is to focus on one platform that will live for years, rather than invest energy in a one-off solution. We will make every effort to make sure we bring our developers forward to our next generation platform.

This decision will require us to take a limited charge of less than $10 million dollars to our earnings. 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. This decision is in the best interest of our customers, our team, our products and our shareholders. I hope this renewed focus at Palm will allow us to deliver more compelling solutions to our core smartphone market, and it will allow us to position ourselves for the long run around one Palm experience.

-Ed Colligan, CEO

Comments

[Satish Mummadi]

Glad to hear the news. And very much excited and will look forward for the Next Generation Palm platform.

[Stephen]

Just wanted to say THANK YOU! I was at a launch party for the product in Sunnyvale, and had a hard time figuring out how it would be useful to me.

I already have a small-form laptop, and I'm quite happy using it for more heavy duty jobs.

While the Foleo was an interesting demonstration of how solid-state memory could boost laptop performance, I just couldn't figure out a real day-to-day use of the device.

[Ramon Ray]

I'm sure you made the decision that was best for you - but I was looking forward to the Foleo.

Ramon Ray, Technology Evangelist & Editor, Smallbiztechnology.com

[Leo]

I'm very glad that Palm has found a strong compass that points toward the direction of success. One that benefits itself from giving what its community of customers wants.

This change of plan on the Foleo should not be seen as a step back, because it's the first step toward a new and exciting course.

[Ben Brandzel]

This is a wonderful decision. It shows that those of us who have stayed fiercely loyal to Palm and fought off all other comers have made the right choice. It means the next Palm phone we will carry will certainly be the extremely powerful, flexible, expandable, simple and well functioning best-in-field wonder we have been waiting for. This was a hard choice, but for all of us who will continue to make Palm products the center of our mobile lives, the right one. Bravo!

[Ben Brandzel]

This is a wonderful decision. It shows that those of us who have stayed fiercely loyal to Palm and fought off all other comers have made the right choice. It means the next Palm phone we will carry will certainly be the extremely powerful, flexible, expandable, simple and well functioning best-in-field wonder we have been waiting for. This was a hard choice, but for all of us who will continue to make Palm products the center of our mobile lives, the right one. Bravo!

[Richard Goodwin]

Finally!! You are Focusing!.

Yes, it was an interesting product with a potential niche. But, really not unique enough to justify all the hype.

Please! Please! make this more than a symbolic Gesture. And bring something GREAT out that takes the Treo/Smartphone category to back to a leadership position where it belongs.

I have an iPHone but I still miss my treo sometimes. There are still features it had that the iPhone does not. However, I just could not justify buying another Treo when it seemed to sputtering and skinking.

I hope this show of focus on the part of managment means that the recent years of fluff advancement are going away and something really great is coming. That products and users become the leads which Palm once again follows!

[XAVIER T PNolan]

:(

[Dennis Yee]

Kudos for Palm for making the right move. Though I am sad when it comes to the squashing of any personal electronics that I may find to be practical and useful in my daily life - I think I can honestly say that the Foleo was the answer to a question no one asked. Especially when that answer is $500.

Now please provide us with an iPhone alternative before all of us quasi-professional Treo users are faced with the dilemma of leaving Palm for a sexier Apple product...

[bulls96]

what are you going to do with the units you have made already?

[john386]

Thank you Palm for taking the time to kill the Foleo before releasing it full of bugs to the 5 or 6 users left who would still buy your products. Too bad you didn't can the flawed 700p before release.

[Ted Kalowski]

Booooo.

[Clifford Ball]

Paul,

I congratulate you on this tough but totally correct decision. I have been a Palm User for over a decade and have seen it go from great to aged to nearly non-functional. My T/X is nearly useless with Windows Vista since most of the 3rd party software will no longer load using Palm Desktop. Your new platform rightly should be your focus and it needs to come to market quickly, it has been far too long.

I want real PDA functionality - better calendaring and Contact management functions, To-Dos, the ability to integrate proven time management systems like "Getting it Done" would be cool, Word Processing, Spreadsheet, Powerpoint, One Note, a secure password archive, utilities for travel, etc. The iPhone went VERY WRONG by not making PDA functionality and 3rd Party Software a priority. Don't make the same mistake. Personally, I use an iPod and don't see that changing any time soon. Music/Video isn't important to me on my Palm.

I look forward with great anticipation to Palm's next leap forward. Remember how you made the Apple Newton look absurd? Time to do that to the iPhone. Make my day.

Clifford Ball

[Richard Tobin]

It was a ridiculous product. Perhaps now Palm can get round to making something useful, like a Tungsten C with a phone added.

[John West]

Wow... I don't own any Palm products or stock, but I'm amazed by this post. This is an example of humility by a company executive that I have rarely ever seen. Most companies would never admit that a product wasn't right yet. This exec was willing to admit to a mistake and make changes to fix it. Yes, $10 million is a lot, but if they would later have lost much more than that, the right decision, though hard, was made.

I applaud Ed for his honesty and humility. More execs could learn from his example!

[Jon]

Since you guys are "Close to shipping" I assume that means you have some of these units floating around. Are you going to sell them off? 'Cause I got to spend some time playing with one at LinuxWorld. I really liked it - and I still want a Foleo. So what it isn't supported. Its linux based!

[Paul Thompson]

Thank you very much for listening to your customers and having the courage to make such a difficult decision. My wife & I are proud Treo 680 users. I am excited that Palm is making such a big priority of the generations of these devices to come. Thanks much!

[Yuvamani]

Good Job Ed.
The Foleo was going to be dead on arrival. Brave decision indeed

[Jonathan]

This to me is a wise decision -- Palm needs to make sure its core business (right now, Treo smartphones) is in good working order before trying to promote a companion device. Do the first well and you'll find a more receptive audience for the second.

[leon]

So there is a working brain cell at Palm then...better late than never I guess!

[Jordan Lund]

I've been a Palm customer since the original III was $360 (that should give you some kind of time frame.)

I remember hearing stories about early Palm development and how the original dummy units were carved out of wood with a UI drawn on paper and stapled to the front.

This was to test the UI, figure out what worked and what didn't. How usable was the platform? How intuitive? Would it get real world use?

The Palm III showed what was done correctly right away.

I don't get the feeling that the Foleo went through this most basic level of testing. It doesn't strike me as something that would get used, certainly not at the price point that was being suggested.

In the end I'm glad to see you guys are moving on to something better.

[upset]

Hi.. this saddens me.. although i never got to lay hands on one, although i thought the anticipated price point was way too high.. i was looking forward to it.. as a writer with a bad back, i'm forced to spend a lot of time in bed.. try resting a six pound hot laptop on your stomach to type.. try writing an article, Editing graphics, or doing serious Web work on a Treo's 2" screen, even with a Bluetooth keyboard..

i would glady buy one of the developer units, although you'll probably landfill them and take a tax write-off..

a two-pound, instant-on Foleo, using my Treo as its Internet connection, with a REAL Web browser, full-sized keyboard, and full-featured word processor would have made my "have to lie in bed for a while" time much more productive.. guess i'll be looking for a super light-weight laptop instead..

I really hope Engadget's long rant last week isn't what pushed you into this decision.. if those jokers know so much, let THEM go raise a few million in VC and build their own dream machine.. talk is cheap..

Mr. Colligan, you just took some anticipatory joy out of my life, and for that, sorry, but i can't thank you.. at all..

[Munk]

I think this was the most widely anticipated in, perhaps ever.

[John]

While I was probably one of the few people looking forward to the Foleo and am quite disappointed that it has been delayed/cancelled, I'm glad to see that Palm is getting focused on their core product...the Treo smartphone.

Palm's neglect of the Palm OS over the last few years and lack of meaningful enhancements to the platform is inexcusable, but at least they are finally making a meaningful commitment to the future of the platform.

The first step of fixing things is to acknowledge that there is a problem. Hopefully this is the first meaningful step to the recovery of Palm and the Treo smartphone line.

[Zohar]

Tough decisions are to be made by brave people, I think this is a brave decision, I do believe the Foleo is a nice idea and would succeed but maybe timing isn't right for it, catch the lag from your competitors and you'll find the right time to continue with this project.