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I remember reading that Palm Computer, wanting their device to be as intuitive and efficient as possible, had a project (or a person) dedicated to reducing the number of steps needed to complete an action.

In my recollection, this is why they ended up having hardware buttons to go directly to the address book, etc.

This would be an early example of a focus on user experience, and I would have thought it would be widely referenced. Unfortunately, even though this seems like the kind of thing they would have done, I cannot find a source for this anywhere.

So my question is: is this story true, and if so, what is the source?

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Yes, it is true, Palm Pilot (the product were in truth referencing above), was developed using modern UX methods such as mockups.

The designer, a chief product engineer named Jeff Hawkins, used a low fidelity mockup scratched onto a wooden block to test his idea. Very interesting reads.

Here are the references I found:

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