It happens that I used to interact with Palm marketing execs. I specifically recall the launch of the LifeDrive, a ridiculous $500 WiFi-enabled... electronic organizer. Even in 2005 it was pretty obvious that cell phones were going to replace PalmPilots. And yet a top Palm PR exec gleefully pointed a chart showing Palm's increasing dominance of the "PDA market."
The pitch was, literally, "It's got a card reader so you can grab the pictures off your digital camera without having to take your laptop on vacation!"
But the thing is... these people really believed in it. The Palm marketing folks -- at least the ones I met -- were all True Believers. They couldn't quite grasp why they got such bad press. They really REALLY believe in Palm.
Though, that said, I don't think ripping off Apple is necessarily a bad business strategy.