Hewlett-Packard's Palm buy could be a good fit, but it's got a long way to go before it can catch up with the iPhone.

Not even a year ago Palm (PALM) and its chief investor, Elevation Partners, confidently spun a yarn about the pioneering company's long-term plan. The smartphone market was nascent. It was going to be massive. Even a small share of such a big market would lead to huge success for a smaller player like Palm.

Unfortunately for Palm, while the first two legs of its narrative stool are correct, the third isn't, which is why Palm folded Wednesday with its fire-sale purchase by Hewlett-Packard (HPQ). Let this be a cautionary tale for all sorts of reasons: More