Here's what I think the Foleo line of business really is in Palm's mind...
In essence, this thing is (or at least will be in the future) an Internet tablet in the form factor of a highly portable laptop, and tightly coupled with the smart phone.
If this is true, you can characterize these devices with three basic points:
1) Web applications and browsing
2) Data connectivity through the smart phone
3) Integration of data and applications with the smart phone
With those guiding points, and a lot more technology and price improvements over the future, I think it makes sense as a significant line of business that has unlimited potential.
The entire future of web applications will be available on the Foleo. There is no limit to the creative ways that the smartphone applications can integrate the two and make life simpler for the user. And additional features like 3rd party applications, OneNote lookalikes, multimedia, e-books, etc are a natural addition. Even the hardware can have all kinds of form factors and capabilities (like touchscreens). It could be anything from dumb terminal to super computer in your pocket (
Clarification: Well, technically, this probably wouldn't make any sense if it actually fit in your pocket, because that's where your smart phone would be. But it certainly could be a high powered device and it could couple with anything from a simple feature phone to a top of the line high powered smart phone of the future.) Maybe even some UMPC models running Windows, but the key for Palm is that it has Palm's special flavor of usability and integration. That's one reason why Treo works - Palm has insisted on implementing its own special usability characteristics that you don't find elsewhere.
When you look at it this way, it's clear that the first device is just the tip of the iceberg. And the future is wide open. It looks bright for Palm if they can execute. And Jeff Hawkins can still be our hero. And once again the world makes sense!