When Teleflip Inc. debuted in 2005, the Santa Monica company that promised e-mail on cell phones made quite a splash: It got a glowing review from the tech columnist of the New York Times and enthusiastic praise from analysts.

But earlier this month, Chief Executive Tony Davis announced that it looks like the company is going down the tubes.

Davis e-mailed subscribers Aug. 12 to say the company, which had as many as 25 employees at the beginning of the year but is down to a handful now, was pulling the plug on Flipmail, its main service.

“We’ve gone as far as we can with our financial resources, and the piggy bank is empty,” Davis wrote.

“We’re definitely in a downsizing mode to preserve the value of the company,” he told the Business Journal.

The problem for Teleflip, analysts said, is that technology passed it by.

Many cell phones, especially “smartphone” models such as Apple’s popular iPhone, and e-mail providers such as Yahoo and Google now offer applications that give users the same service in user-friendly and aesthetically pleasing formats.

In contrast, Teleflip had to break down even short e-mails into several separate text messages. “It was very clumsy,” said Allen Nogee, a wireless technology and infrastructure analyst with the Arizona division of In-Stat, an international research firm.

Davis acknowledged that smartphone technology played a role in Teleflip’s demise.

Also, prospects for revenue were in question. The company had explored putting ads in its text messages, said Mark Suster of GRP Partners, a venture capital firm in Los Angeles that invested $4.9 million in Teleflip at the beginning of the year.

The company also had trial partnerships with cell phone carriers that could have profited if some of its users sent and received more text messages, Suster said.

He said that Teleflip could conceivably sell its technology to another company.

Davis said the company was exploring its options.

The cell phone space poses significant challenges to companies such as Teleflip. They have to find a viable business model while staying on the cutting edge of a quickly changing market, said Harry Wang, director of mobile research at Dallas-based Park Associates.

Suster said the company is halting its main service because it never caught on.

“Our expectation was there would be a lot more viral adoption,” he said. “The consumers spoke on this one, and they didn’t find it a compelling enough service.”