Palm Inc.'s (PALM) decision to abort the Linux-based C$499 Foleo 'mobile companion' was the right decision, according to RBC Capital analyst Mike Abramsky.
"The cancellation is mildly positive given our prior view of Foleo's limited market opportunity," he said in a note to clients, adding that he wondered why a Smartphone user who already has a laptop would even buy a Foleo in the first place.
Mr. Abramsky told clients that Palm has said it will now focus on the development of its next-generation Smartphone platform, but the analyst added that he thinks the company may also be shifting R&D resources in order to speed up updating efforts for the Palm OS.
"Palm may be taking a more realistic stance on speculative projects, and its possible other tough decisions are being made behind the scenes to refocus teams on projects with better risk/return," he said.
Even so, Mr. Abramsky continues to remain caution pending improved visibility to Palm's turnaround and left his "sector perform" rating unchanged.
