Palm announced the new device as recently as May 2007, and now Chief Executive Officer CEO Colligan has axed the Linux project. The product, dubbed the Mobile Companion, was planned as an extension to mobile communications devices, and mainly designed for email and office applications. According to Colligan, the device was close to market maturity.

In the course of the past few months, it had become clear that Palm needed to offer a single platform for all of its devices. "To that end, and after careful deliberation, I have decided to cancel the Foleo mobile companion product in its current configuration", Colligan writes in his enterprise blog, going on to conclude "we can not afford to make those improvements on a platform that is not central to our core focus." Development for the Windows Mobile Platform will continue in cooperation with Microsoft, however, Palm will be looking to focus on its proprietary Palm OS operating system platform.

Palm's CEO says that making the wrong decision has cost the company around US$ 10 m: "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.", says Colligan. He emphasizes the fact that both he and Palm founder Jeff Hawkins still believe in the Foleo's potential, but only as a development on the new Palm platform. Colligan has not disclosed a release date for a Foleo II and attaches higher priority to the core platform and Palm smart phones. Palm raised a storm of publicity by advertising its device at Linuxworld Expo in San Francisco in August, and announcing that Palm had opted for the Wind River Linux platform.