Updated from 2:03 p.m. EST

Palm

(PALM)

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) - Get Report

iPhone imitator, but can one best-in-show phone turn Palm's fortunes around?

Ever since

Research In Motion's

(RIMM)

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?

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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.

"While WebOS and Pre are undeniably compelling, it's too early to call Palm's turnaround," RBC analyst Mike Abramsky writes in a note Friday.

Abramsky's neutral rating on Palm and his wait-and-see approach stems from a bit of skepticism that the company can overcome a few formidable challenges. Having spent the past seven years losing its core customers to RIM and later Apple, Palm has to hope the Pre is compelling enough to reverse the tide. This effort cannot afford any of the ususal setbacks like product delays, supply shortages and telco approval.

(

Photo gallery: 2009 Consumer Electronics Show

)

And speaking of phone companies, an exclusive sales agreement with

Sprint

(S) - Get Report

, the shrinking No.3 carrier, could be a major hurdle. Says Abramsky: An "exclusive launch on struggling Sprint may constrain sell-through."

Even if Palm's Pre is a hit, its got a lot of ground to make up.

"However well done the Pre may be, it is one model at one operator," says CCS Insight analyst John Jackson. "This is an obvious limitation to sales volume, which Palm sorely needs."

Palm shares, which closed Wednesday at $3.36, ended at $5.96 Friday.