As revealed last Wednesday, Palm has announced that it will be closing all 34 of its US standalone stores; the news comes as the company unveiled their response to a 2005 class-action suit calling into question the reliability of its Treo 600 and 650 models.  Although Palm still maintains that Treos have not been failing at “unacceptable rates”, as claimed by many users, it has chosen the cheaper option of issuing rebates on new smartphones to 600/650 owners whose handsets have been replaced or repaired more than twice.

“We continue to focus our company around core business initiatives and are consolidating more resources behind fewer programs in order to compete most effectively and build world-class, category-defining mobile solutions. We have therefore made the decision to close our retail stores” Palm statement

Many suspect that the two announcements, while ostensibly separate, indicate Palm scaling back their financial outlay to not only fund future handset development but buy back goodwill from disgruntled owners.

The company will also repair any Treo 600/650 which is outside of its warranty.  Rebates have been set at $75 for those who bought a Treo 600 between 30th September 2005 and six months after the settlement becomes final, and $50 for anyone who bought a 650 after the settlement becomes final, which should be May 2nd.

For details of how to apply for the rebate, visit http://www.palzasettlement.com/