Palm Inc. stole the limelight at the Consumer Electronics Show by unveiling PRE, a new touch-screen phone and mobile operating system that doubled its share price overnight……that’s right…….DOUBLED OVERNIGHT!

But investors may be celebrating too soon.

At 4.8 ounces, the Pre (pictured here) is light in the hand and smooth to the touch, with a slight curvature to its frame once its slide-out keyboard is deployed. Its black plastic case has only one button, like the iPhone, beneath a big, 3.1-inch touch screen. 

The Pre's sleek back has a lens for its 3-megapixel camera, and a hidden tab on the side reveals a USB slot for music, charging and other data. Users can access a full keyboard by gently sliding up the phone's face. 

The phone's unveiling drew cheers from a packed auditorium in Las Vegas, but the device was not on the CES exhibit floor as Palm is still putting finishing touches on the phone. 

Palm Chief Executive Ed Colligan and Jon Rubenstein, a former Apple executive who helped create the iPod, described how users will be able to keep multiple applications open, such as email, maps, photos, and move between them. Pre perceives applications as "activity cards" that users can flip through on the touch screen, Palm said. 

Rubenstein’s iPod experience made him the ideal person for the Pre’s development and rollout which analysts have said looked strong enough to challenge the iPhone, BlackBerry and handsets using Google Inc's Android operating system.

"Apple is not going to be staying in one place. Neither will Google. Neither will Research In Motion," one analyst said, adding that it was unknown how well Pre would compete with a new iPhone he expects Apple to bring out around mid-year. 

Pre's high quality suggests it could command a high price, but Palm would need to stick as close as it can to the iPhone's $200 price tag, which set a benchmark for U.S. smartphones when it came out last July.

The Pre comes about a year and a half after Palm famously pulled the plug on its last big technology idea, the Foleo which was a public relations nightmare, was a much-hyped portable computer that was harshly criticized when it was unveiled in May 2007 and abruptly canceled in September, just weeks before it was to expected to ship.

"Palm webOS is something we can innovate around for a long time to come. The platform is going to support a whole line of products and there are other products in the pipeline," said Brodie Keast, Palm's senior vice president of marketing.

Palm said the Pre will be available on Sprint's network in the first half of 2009. Analysts said they were anxious to know if an overseas version would follow, and wondered about the duration of Palm's U.S. exclusivity agreement with Sprint, which has been engaged in a long struggle to stem customer losses.

Time will tell whether the Palm Pre will be an heir to the iPod throne or just another “neat little gadget” for the geek crowd. Whatever its destiny may be, for now it is THE PRODUCT of the 2009 Consumer Electronic Show.