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Palm Pulls Foleo

Palm cancels its companion device to the Treo and will take a charge of less than $10 million.

SAN FRANCISCO -- In the end, no one will ever know how

Palm's

(PALM)

Foleo device would have fared.

But Palm probably saved itself a good deal of money and effort, not to mention embarrassment, by cutting its losses and euthanizing the

greatly lampooned product before it ever reached store shelves.

In a posting on the company blog late Tuesday, Palm CEO Ed Colligan disclosed that the Foleo mobile companion product is being canceled so that Palm can focus on creating its next-generation software for smartphones.

"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," Colligan wrote.

The Foleo is small, laptoplike device that Palm designed to work alongside a smartphone, providing a larger screen and full keyboard for mobile professionals who need to check email and edit documents on the go.

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Palm unveiled the Foleo in May, after months of speculation about what the creators of the seminal Pilot handheld and Treo smartphone were cooking up.

But the Foleo was met with widespread derision, as analysts said the company had produced a gizmo that required people to carry around an extra device (whereas the trend is to integrate traditionally separate devices a la

Apple's

(AAPL) - Get Report

iPhone), and questioned why anyone would pay $499 (after a $100 rebate) for the Foleo when a full-featured laptop wasn't that much more expensive.

Colligan said he and co-founder Jeff Hawkins still believed in the Foleo concept and promised a future version of the Foleo based on Palm's forthcoming software, although he declined to specify the release date for such a device.

Colligan said the company will take a charge of less than $10 million to its 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," Colligan wrote.

Shares of Palm closed the regular session up 13 cents to $15.13.