Palm’s decision to cancel its Foleo mobile companion product could be seen either as an embarrassing U-turn for the handheld pioneer, or as a sign that the company is listening to users and focusing on improving its smartphone line-up to survive in a competitive market.

The Foleo, an accessory to Palm’s Treo smartphones, was unveiled in June and was due to ship this summer in the US, with availability in Europe expected by the end of the year. Its 10in colour screen and full-size qwerty keyboard made it look very similar to a small laptop, but it was designed to link to a Treo via Bluetooth and use the phone to surf the web and pick up email.

Critics of the device pointed out that it was a similar size and weight to many ultraportable laptops, and that the biggest potential market for the Foleo ­ - travelling executives ­- would therefore prefer to have a laptop.

Palm pulled the plug on the Foleo in a message on its official blog on 4 September. Palm chief executive Ed Colligan said the firm wanted to concentrate its development efforts on smartphones. Specifically, the firm is pushing ahead with its next-generation software platform based on Linux and the first handsets that will accompany it. However, the platform now seems to have been delayed until next year.

Whether or not you liked the look of the Foleo, the decision to focus on new smartphones seems like the right thing for Palm to do. Its current crop of Treos may be doing well in the US, but in Europe it faces competition from Nokia and other Symbian handset makers, and many Treo models are starting to look dated compared with the slimmer new handsets.

But why is it taking Palm so long to come out with a new platform? The idea of building a mobile version of Linux with a Palm compatibility layer was unveiled by Palm’s former software subsidiary PalmSource three years ago. Palm lost interest in using this following the acquisition of PalmSource by Japan’s Access Software.

In the meantime, Palm has turned to Microsoft’s Windows Mobile software for some Treo models, in recognition of the fact that many business customers prefer this to the ageing Palm OS. But the danger in taking this route is that Palm risks becoming just one more vendor producing Windows Mobile phones and will lose a measure of control over the software that runs on them.

Palm seems to have accepted that it needs Windows Mobile if it is to keep a foothold in some markets. But if it hopes to still find success with its own platform, Palm needs to introduce it without delay, and ensure it has compelling devices to run it on as well.