Update: Palm unveils Foleo PC as smartphone companion

Despite consumers' cool reaction to ultramobile PCs, Palm will launch a handheld computer called Foleo with a full keyboard and 10-inch screen.

The product, announced Wednesday, seems to fly against Palm's own strategy of migrating away from PDAs (personal digital assistants) built around data entry to smartphones centered on voice operation. Hardware vendors can earn larger profits selling the more expensive smartphones, such as Palm's Treo, which have grown in popularity thanks to features such as mobile e-mail.

[ Slideshow: The Foleo first looks  | Video: Jeff Hawkins pitches the Foleo ]

Now Palm hopes to ride the coattails of smartphone popularity by pitching the Foleo as a "smartphone companion product." Users would carry both devices in their pockets, synchronizing data between the platforms just as PDA users swap data with their PCs.

"Smartphones will be the most prevalent personal computers on the planet, ultimately able to do everything that desktop computers can do," but at times, users need a bigger screen and full-size keyboard, said Palm founder Jeff Hawkins in a statement.

The 2.5-pound (1.13 kilogram) Foleo stays connected to its companion smartphone through a Bluetooth wireless link and supports Internet browsing with either its own Wi-Fi card or the smartphone's radio, Palm said. Together, the wireless networks will allow users to read their e-mail and office documents such as Word and Excel files on a large screen instead of a cramped phone display.

The Foleo PC uses the Linux OS, and is designed to synchronize with both the Palm OS and the Windows Mobile version of the Treo smartphone. However, Palm hopes to sell the Foleo to users of all types of smartphones, saying it can easily link to most smartphones based on Windows Mobile, and requires a modest development effort to link to smartphones using operating systems from Research in Motion., Apple, or Symbian.

By choosing the Linux OS, Palm is also encouraging software developers to create new applications for the platform. That decision could be a successful strategy, one analyst said.

"Using the analogy of the OS as plumbing for the device, with Linux all the plumbing is already developed, so it's easy to layer your own application on top of it," said Todd Kort, an analyst with Gartner. One drawback might be the proliferation of 10 or 20 different types of Linux flavors in the market, but several consortiums are tackling that problem by trying to define software standards, Kort said.

Palm will also win some marketing buzz by being one of the first vendors to bring a Linux-based handheld PC to the United States. Motorola and other vendors sell some comparable products in China and Japan, but have not yet brought them to the United States, Kort said.

Palm will sell the Foleo in the United States this summer for $499 after an introductory $100 rebate.

Palm is already planning ways to improve the device in its next generation, Hawkins said in a Webcast Wednesday.

"One limitation is that we don't have a fast enough processor to support certain video -- if you go to YouTube, that video would be jerky," he said. "We're not happy about that, and we plan to address it in the future."