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For years now, Palm cofounder Jeff Hawkins has been promising his company will come up with "a new product category" — some leap of the imagination, akin to the original PalmPilot handheld organizer, that will define an entirely new submarket of gadgets. The Treo smartphone was, genuinely, such an advance. And the way Hawkins talked up the Foleo, the lightweight, underpowered Linux laptop he revealed at the D: All Things Digital conference earlier this year, you'd have thought it, too, was a real breakthrough. Hawkins may have fooled himself, but he fooled no one else, including, at long last, Palm's own management. Palm is taking a $10 million charge against earnings to cancel the development of Foleo — and this on the eve of its release.

Palm CEO Ed Colligan, a longtime associate of Hawkins, blogged the news yesterday, less than two weeks after Engadget editorial director Peter Rojas demanded the Foleo's cancellation — a screed for which Colligan, masochistically thanked Rojas. (I'm not sure whether that says more about Rojas's influence, or Palm's weakness.)

The company is now in a tight spot. The organizer market continues to dwindle perilously; the smartphone market has been roiled by the advent of Apple's iPhone; and the Foleo, Palm's supposed third product category, a shimmering mirage on which Wall Street types could pin their hopes for growth, has been revealed as an illusion.

Colligan, however, included a sop for Hawkins. And, perhaps, for the most optimistic of investors. He's promised to keep developing the Foleo, this time on a new software platform Palm has in the works for its smartphones. I can't see it happening, though. The Foleo was always a stopgap measure, a product for the here and now , meant to ease the pain of using a smartphone's tiny keyboard and screen until laptops get lighter or smartphones get more powerful. Apple fanatics will tell you that that day has arrived, in the form of the iPhone. I'm not convinced of that. But the future path of handheld, connected devices is clear — and no one, save perhaps Jeff Hawkins, sees a device like the Foleo as part of it.