Seriously, did they really think Palm wasn't going to fail? What on earth were they thinking? Has Palm ever done an OS correctly? EVER? Lets see, their competitors were Apple, which has been lauded as the most user friendly in every type of OS they've ever produced... Google, who doesn't seem to be able to write anything that geeks don't love... and Microsoft... ok, maybe they could steal all 25 of Microsoft's mobile customers. Good Business decision HP... oh wait, I forgot, HP makes all their money off of printer ink.
Let's see, when Palm was first starting out, their competition was Apple in the form of the Apple Newton... I remember how the Newton flew off the shelves... oh wait... no they didn't... Palm PDAs were flying off the shelves. In fact, Palm's OS was put into a smartphone an entire DECADE before Apple got into the market. Then came Windows CE, which actually was competition for Palm. The original developers for Palm split off into their own company called Handspring, which produced the Treo (which first ran Palm's OS). Palm acquired Handspring, and for some strange reason, switched the Treo to run Windows Mobile. ALL of this happened before Apple and Google entered the smartphone market.