Palm today axed its soon-to-be-shipping Foleo mobile companion device, according to CEO Ed Colligan on the official company blog. Colligan attributes the cancellation of the Foleo to Palm’s two-platform strategy that would cost more money in the long run.

Instead, Palm decided to focus on a single next-generation platform for its Smartphones. Despite the company focusing on one official software platform, the company will continue to develop Windows Mobile powered devices.

The Palm Foleo, in its current state, still required a number of improvements to make it a “world-class product,” Colligan said. Colligan also goes on to say the company cannot afford to add the improvements needed, as it is not the company’s primary focus.

Palm will take a less than $10 million hit to its earnings due to the cancellation of the Foleo, but it’s a small cost compared to what supporting two platforms would cost the company, Colligan said.

For those that were looking forward to the Palm Foleo, not all is lost. Colligan believes the Foleo has potential and plans to develop a Foleo II on Palm’s next-generation platform. However, the company does not have any solid plans for the Foleo II yet, as the company wants to work on its platforms and Smartphones first.

Nevertheless, Palm isn’t the only company offering a miniature PC or mobile companion device. ASUS plans to ship its Eee PC UMPC later this month. The ASUS Eee PC offers a 7-inch display with Ethernet, 802.11b/g wireless and an Intel processor.