The decades around the turn of the 20th Century were a time of technological change that is hard to appreciate even when reading about it on the screen of a smartphone. In a relative eyeblink, the world went from whale-oil lanterns and horsedrawn carriages to electric light and automobiles. Telephones, automobiles, radio, powered flight: A seemingly endless stream of inventions were changing the landscape of the world, and among those dazzling gadgets were self-loading firearms. Maxim guns were starring in the tales of colonial wars and, with the development of early self-loading pistols, anybody could have this kind of H.G. Wells technology right in their pocket!
Colt's was first off the block, licensing several designs from John Moses Browning, and their sales success had the other major manufacturers scrambling for a slice of the pie. Savage followed quickly, with an ingenious design by Elbert Searle that used a double column magazine and an ad campaign touting "10 Shots Quick!" Harrington & Richardson jumped in in 1912, licensing a design from English firm Webley & Scott.
Smith & Wesson wanted some of this action, too, but had the same problem that the others did: Patents. Colt's Browning patents covered a plethora of details, from the one-piece slide and breechblock to the method of attaching the grip panels to the frame with screws. S&W had two choices: hope to find a handy homegrown savant like Savage did, or shop overseas for a design to license, a la H&R.
Smith settled on a Belgian design, the Clement, and modified it to suit the U.S. market, adding a grip safety and other embellishments that they thought would help sales. Unfortunately, compared to the fairly simple designs from Colt and Savage, the Smith & Wesson was positively baroque, with a parts count nearly double that of its competitors. Further the control placements went beyond counter-intuitive and were actively user-hostile.
The grip safety was a tab on the front of the frame and for some users it took an active effort to disengage. The manual safety was a thumbwheel that protruded through the backstrap and could not be operated with the hand in a firing grip. The heel-mounted magazine release on the earliest ones moved not fore-and-aft like everybody else's, but side-to-side; this was quickly changed. Lastly, the light breechblock necessitated a monster recoil spring in this blowback design, and so a sliding toggle decoupled the breechblock from the spring so that the action could be manually pulled to the rear and them pushed back forward to chamber a round. Good luck not fumbling that under stress.
As though to hammer a nail into their own coffin, Smith & Wesson also designed a new proprietary cartridge for the pistol: .35 S&W Auto. Similar to the .32ACP, the slightly larger round was partially metal-jacketed, with a larger exposed lead driving band that would engage the rifling. The theory was that this would couple the reliable feeding of round-nosed FMJ with the reduced barrel wear of lead bullets. Since everybody else had standardized on the Browning-designed .32, S&W owners had a harder time finding more expensive ammunition for their complex, hard-to-use pistols. This was not a recipe for sales success.
The final straw was the on-again, off-again production of the pistol as Smith intermittently shut down production during the war years of '14-'18 to fill various foreign and domestic military revolver orders. When production resumed at a normal pace after the war, sales continued to be sluggish until the plug was finally pulled in 1922 after a production run of only 8,350. It would be another thirty years and more before Smith & Wesson dipped its toe in the commercial self-loading pistol market again.
Due to its rarity, the Smith & Wesson is among the hardest to find and most expensive of the early American self-loading pocket pistols. Colt's and Savages are out there in the hundreds of thousands, and the H&R and Remington competitors are five and eight times more common respectively. As a result, even a basket case of a Smith parts gun is a rare sight and usually has a price tag of a couple hundred bucks hanging off it, while a pristine example "in the box with the docs" will bring a thousand or more. The above example, from the middle of the production run, is in honest 95+% condition, showing only light handling wear and a pristine bore and unmarred breechface, was picked up for $600 at a gun show in Indianapolis in 2012.