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CEO Ed Colligan said that the decision had been made in order to allow Palm to concentrate on its new software platform. Colligan revealed in April that the rumours of a Linux-based Palm OS were true.

"We are very excited about how this is coming together," he explains on the Palm blog. "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."

Foleo, the brainchild of Palm founder Jeff Hawkins, was was unveiled in May, and you have to wonder

Click here to see PC Pro's video preview of the Palm Foleo

Palm insists not. "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," Colligan elaborates. "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."

However that does not mean Foleo is dead, merely hibernating. "Jeff Hawkins and I still believe that the market category defined by Foleo has enormous potential," Colligan says. "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."

But he declined to speculate on when this will happen. In the meantime the cancellation of Foleo I will cost Palm $10 million.

"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 explains.