When I checked my e-mail this morning, I was surprised to read an announcement from Ed Colligan, Palm’s CEO, saying he has “decided to cancel the Foleo mobile companion product in its current configuration…”

Colligan said Palm will instead focus on the “next-generation” operating system it is currently developing as well as on the first Palm smartphones that will use this platform.

But fans like me who were so excited in seeing the still unreleased Foleo don’t have to worry as we will still be able to use a much-improved version in the future.

“Jeff Hawkins and I still believe that the market category defined by Foleo has enormous potential. When we do Foleo II it will be based on our new platform, and we think it will deliver on the promise of this new category. We’re not going to speculate now on timing for a next Foleo, we just know we need to get our core platform and smartphones done first,” Colligan said.

Gizmodo.com was the first to break the news.

Read the full text of Colligan’s announcement at the official Palm blog.

While this is a bit sad, I see it as a good sign that Palm is listening to its users.

A few weeks ago, Engadget.com published a lengthy and frank open letter to Palm, which enumerated Palm users’ disappointment over the company’s lack of innovation, among other things. It also laid out a number of suggestions that, I believe, summarized the Palm users’ wish list.

“Stop wasting money on the Foleo,” was among Engadget’s suggestions. It described the Foleo as “just a distraction from the main business you’re already neglecting.” Though I don’t totally agree with it as I found the Foleo an exciting and hassle-free alternative to a bulky laptop, I have to admit that Engadget has a point about Palm neglecting its main business.

My favorite on Engadget’s list of suggestions was the one about Google:

Get with Google– You’ve already taken some baby steps here — it’s great that you’re pre-loading Google Maps and all that — but you need to go deeper. Offer a great mobile versions of Gmail, Google Calendar, Google Reader, etc. and you’ll have a good shot at winning over some of the millions and millions of people who have migrated to Google’s ecosystem. Besides, it’s not just about syncing with the desktop anymore, it’s about syncing with the cloud.

Engadget’s open letter as well as nasty comments on Palm’s official blog are probably among the factors in Palm’s decision to temporarily discontinue the Foleo. With this development, it appears that Palm is getting ready to fight it out in the SmartPhone and mobile computing market.

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