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

[Justin DeLay]

I am proud to see Palm, a company I have been loyal to for the past 6 years, make bold decisions to do what they believe is right for their long-term validity, but truly saddened the Foleo, even in its current configuration, will not see the light of day. At first I was skeptical and joined in the chorus of naysayers on forums eager to decry the Foleo. But over time I began to understand just how truly valuable a light-weight, long-lasting, instant on and elegantly simple sub-laptop could be. I literally made myself my own cardboard mockup of the device and carried it around my office. The potential of the Foleo cannot be grounded in today's laptop uses. It truly is a shift in paradigm. I live through my Treo. The only use I have for my laptop is to rip CDs and to type the occasional longer email. My only complaint with the Treo is the diminished web browsing and typing experience. The Foleo fulfills that need. I don't want to fulfill that need with a hot-running, slow-starting, complex and expensive laptop. I guess I truly am a minority with this need, but I am left to wonder if the even smaller minority that loudly populates internet forums overshadowed those who would rather enhance their workflow via mobile computing solutions than proclaim the death of all things Palm. Please do not give up on the Foleo category of products. You were so close and with renewed drive and focus, you can deliver on this vision.

[ALZ]

Smart move Palm!
Now develope a TX with cell radio!! It will be a killing Device!!

[ric]

What you need is a slim, sexy, sexed-up Treo. With Wifi, for god's sake. And running whatever this month's favourite non-WM6 OS you're working on. Nothing else. Make it nice, make it play nice with Macs, and sell millions of them.
Spend the profits on some board members with some bloody commercial vision rather than the eejits who are running the ship at the moment.

Geeks love Palm. We hate the way it's been slowly made an irrelevance by your poor stewardship.

Ric

[fred carnighall]

best decision ever!!!!!!!!!!

Now, bring us some good devices, please :)

[GadgetGav]

Oh dear. What a day Mr Colligan. Did you see the iSuppli report on iphone sales? Looks like those "PC guys" just walked in...
And now the Foleo gets yanked just as you were "nearly at the point for [sic] shipping"...
Did you walk under a ladder on the way to work this morning?

[tonio]

Let's hope the new operating system will be opensource, it was one of the main reasons the public supported it in the first place!

Good luck!

[Frank McCamant]

What a togh decision, but probably a good one in the long run. I was really looking forward to buying a Foleo ASAP, so I am totally disappointed!! I'd be happy to take one of the pre-production models in stock.

BTW - thank you for the communication via email to all of us. That was weel done. Bravo!

[Leonard Lww]

Wow! This is terrific news. I can't wait to see what you guys come up with as your next-generation platform, and I really do think this direction is the best one for Palm.

With Palm's track record of expertise in this arena, I'm anticipating your next, revolutionary, product even more than Apple's first tentative foray into mobile communications. I believe Palm could, potentially, create a device that does all the things the iPhone does not, but should.

Can't wait! Very excited!

[Jonathan]

Not sure you'll read down this far, but heartfelt congratulations on this brave decision. Far too many companies press ahead with products because "they've started so they'll finish" - it's much harder to admit things aren't right, take a step back at a short-term loss/write-off but save the longer term financial damage. Your investors should have faith in your honesty and conviction, plus the focus on getting the most important things right. As someone who has drifted away from Palm over the last five years, I'm looking forward to you returning with a vengance!

[Nick]

Yes, like the poster above mentioned, make a Killing device. That's where the money is at these days.

[AndAl]

Excelent Decision Palm!
Now, I look forward to see the following features in one of your future devices:
- Huge 320x480 screen (same as TX)
- Wi-Fi
- Skype
- GPS
- Cell radio
- At least 8GB of internal flash memory.
- File Explorer
- Multitasking
- Removable high capacity battery (2400mAh or higher)
- Please do not forget including IrDA and Bluetooth as I cannot live without my palm universal remote control applications

I don´t care about a keyboard. I think a big display is more important because in this way you can read documents and watch moves or Digital TV without glasses. Besides, if you need to write something quickly there is Mini-kbd application which turns the whole Palm display into a big Virtual keyboard and you can even use your fingertips to type faster than on the tiny Treo Keyboard.

[Chris Cogan]

I find it hard to believe that you would go through the full product development cycle, and then decide that the format wasn't in Palm's long-term plans. I have been a long-time Palm lover, from the Palm III through the Tungsten, and currently own a Treo 680 (which I purchased to replace a Blackberry 8800 which I found lacking.) You've got people thinking you don't know where you're heading. If you bring the Foleo back, use the Palm OS, or if you're going to linux, put that on your phones, too. Make the Foleo functional without a phone- include a modem in it. Add bluetooth so that it can be a phone replacement. Include multiple SD slots for greater memory, similar to multiple hard drives. In other words, make it a large screen, full- keyboard Treo. Then I could leave both the laptop AND my phone at home if I wanted to. Make the battery removeable, like the Treo, so that spares could be carried. I think Jeff is right, there is a market for a mobile net capable e-mail device, if done right. I hope you do some more market research, and figure out who you're making this for. Then ask THEM what they want you to build.

[Beto Largman]

Good move! Hope I will write about new and revolutionary products delivered by Palm very soon.

[Dan Ayers]

I have been a dedicated palm user since May 2001.

take note of the clamshell samsung i500 and make 1 treo even half as nice. No keyboard!!!!!

Grafiti. Small. Light. clamshel phone that doesn't look clunky or dorky for college students and young-professionals but looks just like any other phone, with all the functionality of a treo.

[Robert Rinaldi]

Wow...I'm impressed, thats tooks "balls"....now hopefully you guys will get a nice Treo 800p and Centro out the door soon(personal I say drop Windows Mobile...get back to what made Palm, Palm, great hardware and software)..similarly to Apple of the PC world

I'm very impress Mr. Colligan...hopefully you'll lead Palm back to success....similar to how Steve Jobs did when he came back to Apple in 1997.

I'm now more eager then ever to see what you guys are coming out with next, and have plans to buy a smartphone to go along with my iPhone.

I truely hope Palm doesn't go any where...we need companies like you, fighting the good fight!

[CES]

Glad to know you are going to focus on the new Palm OS plataform.
The only thing I beg you Palm is to give a good upgrade for Palm TX. I have read about drop in prices of TX and other palm PDAs. I do hope this is a sign of a brand new Palm TX comming soon with Cell radio. The Treo display is too small for viewing documents, read email, watch moves, ....
I know you were thinking about the display and keyboard limitations of the Treo when you came out with the Foleo Idea, but the TX has the perfect size for a really Mobile Device. The TX is pocketable, slim, lightweigh and sex:)
The Iphone will have no chance with a TX Phone!!!!!

[Eric B.]

As someone who started using the Treo about a year and a half ago, I was extremely excited about getting my hands on a Foleo. As a first-year grad-student, with a couple of "online" classes, I was looking forward to carrying around something light-weight that would allow me to work from "wherever." I'm glad you guys are focusing on improving the platform but, for selfish reasons, I am very disappointed about this decision. I sincerely hope you do not abandon the Foleo concept because I do believe there is a market for an "instant on" device that will allow you to be productive on a moments notice. But, if you have a Foleo that hasn't gone to the dumpster yet, I'd be glad to take one off of your hands until the II comes out. Seriously.

[Georg Schuler]

I'm sad the Foleo was cancelled, i had high hopes for it, but i understand the decition.

THE great feature besides the intant on/off was the Linux based system and allthough i didn't have the spec's to the OS i hoped Palm would finally see the potential in the community and use it.

Introducing a new Palm OS is great and all...
Basing it on Linux would be the smart thing to do.. Why ?
With the introduction of a new OS all the Palm programmers out there need a new SDK anyway why not expand to then's of tousend's linux programmers that might become potential Palm programmers.

And with them on board and ton's of great and FREE apps the Foleo II and the future smartphones might both become world class products ! (the smartphones already are, but in combination)

btw. Foleo II should also have 10+h of battery life to be a real kicker ;-)

Good luck 2 all Palmer's...

[Alex]

Amen, Mr. Colligan! Thank you for taking charge there. Foleo was a step back and looked like a device from the past.

Perhaps the next gen Palm device should be designed by a next gen team. I'm not sure Mr. Hawkins is serving the Palm brand as effectively as possible. The brand feels old and needs to be fresh again. Until then, I'm keeping my iPhone (gave my non-functional 700p to my niece - she won't be bothered by the crashes and resets.)

[mikeE]

I think the Foleo was just slightly ahead of it's time, especially as the smartphone becomes the center of our communication hub (just like apple marketed the mac as the center of the "iLife" hub). And I'm really hoping the Foleo II is out sooner rather than later.

But in the meantime, may I please have one of the original Foleo's you're not releasing? I hadn't been this excited about a product since my first iBook, back when Apple stock was a measly $12/ share (and of course, I couldn't afford any then!)

[Gianmarco Carnovale]

Appreciable move! Despite I was one of the few (sure? there's so many, here...) looking forward for the Foleo, I find that re-focusing on your core business is the best thing you guys can do.

Besides, you should also re-build your network of PUGs.

But... may I understand the reason why you just don't get ALP from Access, and focus on the hardware side?

If you'll consider to some how sell pre-production Foleos, I will be interested to get one.

[Jon]

It's a bummer to hear that the Foleo won't be released. While I never quite grasped why someone would spend $500 for a foleo when a full-blown laptop can be had for roughly around the same price point, I can see the weight/size/instant on being attractive to some.

As a PalmOS developer, I am glad that Palm is refocusing on their roots. Hopefully some of the code used for the foleo will be re-usable for the future (Linux) platform.

One thing Palm may consider is selling the pre-release inventories to developers at a decent low price. I for one would have liked to have received a foleo to see what it was all about. The PalmOS developer community has pretty much been hung out to dry over the past several years, it would certainly be a nice gesture (and make more $ than a tax write-off).

Just a thought... If this idea is considered, please sign me up for one.

[JBA]

I have carried a Palm device since I got a Palm III many years ago. Faced with my second endlessly rebooting Treo, I am now eagerly awaiting a Blackberry at the end of the week. My wife continues to use a Palm V that I have long moved past, but the current Palm OS clearly cannot support the burden that is placed on it by smartphones. Years of finger-pointing support people (it's your software, it's your carrier, it's Goodlink, etc) have done no favors for this brand, and I agree with those who suggest that the problem is a strategic one for Palm. Foleo or not, I fear I am out the door.

[Andrew Lee]

Ed,

Thank you for being honest and brave. I've been a loyal palm user since 1999 (when I was 17 years old). I currently use a Treo 700p with pride.

You have my emotional and financial support in this: I will be buying one of the next gen.

Thank you for your work on this.

And like the others have said, if there are Foleos that will be trashed because of this... let's find other options. I'd be willing to buy one at a reduced cost (even though I know there will be no further support or development) to help offset the development costs.

Sincerely,

Andy

[Imabug]

I really hope the focus on the new platform includes some non-phone hardware to run it on. I like Palm. I don't need or want a smart phone. Please don't make me start hunting E-bay for refurb T3s and TXs to keep me going.