Palm unveils compact laptop device

 

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By Reuters and Simon Aughton

Posted on 31 May 2007 at 08:21

Palm has introduced its long-awaited 'third product', a compact portable computer to accompany its Treo smartphone.

The new Foleo is about the size of a hardcover book and, at around 1.1kg, half the weight of other small laptop computers. It is designed to be used with a smartphone, to help business travellers better manage their email and documents by providing a 10in screen, full keyboard and wireless technology.

Palm, best known for PDAs and Treo phones, said it expects the Foleo to eventually work with rival smartphones such as Research In Motion's Blackberry and Apple's iPhone, although it has not discussed technology-sharing agreements with those companies.

The Foleo is very much the brainchild of Palm founder Jeff Hawkins, who has been working on the device for at least two years. He said that he expects unit sales of Foleo - priced at $599 before a $100 rebate beginning this summer - to be smaller than Treo units sales at first.

'Ultimately, it will make smartphones more successful,' he said in an interview. 'The volume we anticipate selling of Foleo initially will be small compared to the volume of Treos. It's not going to be a driver in the short term. But it allows us to rethink how you design smartphones.'

The Foleo may signal a shift in focus for Palm, which dominated the PDA market after it launched its original Palm Pilot in 1996.

Its PDA sales dwarfed those of rivals such as HP and Sony, but PDA demand dwindled early in this decade as similar features were built into cheaper mobile phones.

Palm's Treo, which combines a phone with its PDA operating system, eventually became the company's signature product with shipments of 2.3 million units in the last fiscal year.

Tim Bajarin, an analyst with Creative Strategies in San Jose, said mass appeal for the Foleo is not likely, since smartphones represent a fraction of the overall mobile phone market and only a portion of those customers will be interested in carrying a separate device. Moreover, many business travellers are resigned to carrying a smartphone and a full portable computer.

'I will argue that this product is for the road warrior. It's not probably for mainstream, it's more of a business tool,' said Bajarin, who noted that Foleo will compete with low-cost laptop PCs. 'It will hit a nerve with a certain segment and in that sense has a lot of potential.'

However, the Foleo's Linux operating system could give the device a boost. 'One big unknown is what happens if the open source world decides to embrace [Foleo], as the first mobile Linux portable. It actually has potential ... if the open source world decides that this is a powerful way of expanding the Linux franchise,' Bajarin said.

Separately, Palm chief executive Ed Colligan played down speculation that the company was for sale, saying that the new product proves it is working on innovation.

'We're not focused on figuring out how to sell the company,' he said on the CNBC television network. In March Palm reportedly hired Morgan Stanley to investigate the possibility of a sale.