With a lot of fanfare, Palm released its latest smart phone yesterday, the Treo Pro. For us long-suffering users of Palm devices, the reaction has got to be “better late than ever.” Palm, which introduced the first commercially-successful PDA, the PalmPilot, in 1996, has struggled to stay at the forefront of the mobile phone business. The new phone, lighter, slimmer and more modern looking than most of Palm’s recent models, is loaded with the features that Palm users have long hoped for, including WiFi and GPS.

Palm once dominated the market for smart phones, but Nokia, Motorola, Research in Motion (BlackBerry), and Samsung chipped away at its lead. Apple’s iPhone, of course, rewrote the standards for smart phones with its touch screen and truly-usable browser. The Apple device looked a lot more modern than phones from Nokia, Samsung and LG, but it made the clunky Palm devices seem absolutely prehistoric. Palm’s market share has fallen by half to 16.9 percent in the last two years. The company’s stock price is down 90 percent from its high in March 2000, trading at around $7.75.

The company’s hopes rest on executive chairman Jon Rubinstein, brought in by Elevation Partners, the private equity firm that invested $325 million in Palm for a 25 percent stake last year. Mr. Rubinstein spent nine years at Apple, involved in designing the iPod and the iMac. His impact was first felt with the Palm Centro, whose design he tweaked. The low-cost phone has ended up selling more than 2 million units since its introduction last November.

While Palm has lined up mobile operators to sell the Pro in Europe, no U.S. distributor was announced. The company says it will sell unlocked Pros for $549 via its online store.

Palm faces tough completion in an environment that sees smart phones as PC replacements. Mobile devices are increasingly cast as platforms and companies try to recruit software developers to build applications for their devices. Venture firms have set up funds to support development for the iPhone and for the new Android devices promoted by Google. Nokia has long promoted development on its Symbian-based N60 devices.

Palm has won considerable support from software designers, with more than 30,000 applications available on its Palm operating system. But the Treo Pro runs on Windows Mobile, seen as more business-friendly. Matters will get even more complicated because Palm plans to introduce a new operating system – and another new phone – next year. For Palm, it is now showtime and the clock is running.