Palm Compensating Treo Owners, Closing Stores

In the wake of a class-action lawsuit that resulted in it having to compensate some Treo owners, Palm is closing its retail locations.

As part of the settlement for the suit that was filed way back in 2005, the company has reportedly agreed to issue cash rebates towards new smartphones to customers who have had their Treo 600 or 650 “replaced or repaired at least twice,” CNET’s News.com reports.

Palm apparently issued separate announcements for the store closings and the settlement, but Tom Krazit, who wrote the News.com story, points out that “it’s not hard to see one affecting the other. The rebates are only for users who purchased, or plan to purchase, a new Palm smartphone after sending their old one in for repairs at least twice, which is kind of expecting a lot of those folks, I think.”

Officially, Palm’s explanation for getting rid of its retail locations is that it’s consolidating its resources “in order to compete most effectively and build world-class, category-defining mobile solutions.”