Palm Up, but Please Hold Your Applause

Updated from 2:03 p.m. EST

Palm (PALM Quote) shares have surged more than 75% since the fallen device star introduced its Pre touchscreen phone that stole the show at CES Thursday.

Gadget fans and Palm investors were thrilled by the newest Apple (AAPL Quote) iPhone imitator, but can one best-in-show phone turn Palm's fortunes around?

Ever since Research In Motion's (RIMM Quote) BlackBerry and later Apple's iPhone pushed Palm's Treo off the top of the smartphone mountain, Palm has struggled to recapture its glory. Without a hot phone to sell, the company has been running deep in the red, booking a $650 million net loss on $1.2 billion in sales over the past year. Thanks to two cash infusions from Elevation Partners, the Sunnyvale, Calif., tech shop has managed to keep on ticking.

With time running out, Palm has effectively been living for its Pre moment in Las Vegas Thursday. And witnesses say they nailed the presentation.

Palm Pre: iPhone Killer?

The final version of the phone wasn't available for testing, but the preliminary reviews were glowing. The Pre earned big points for a slide-out keypad, flash 3 megapixel camera, quick processing and a multi-touch screen. Critics took off points for its thickness and lack of a memory card slot.

Despite the recession and rising unemployment, consumers still have an appetite for smartphones. So if nothing else, timing is on Palm's side.

(Photo gallery: Smart Phones )

But analysts have fresh memories of Palm's lost years. These were the rocky times punctuated by Treo retreads and the Foleo, an awkward stab at netbooks that correctly predicted a new category, but was fatally positioned as a Treo accessory. Palm killed the Foleo project after four months.