Palm (NASDAQ: PALM), the failing smartphone company, has launched a new version of its Treo handset. According to The Wall Street Journal, the new version of the product has newest Windows Mobile operating system, a GPS system and WiFi capability. It will run on the fast Sprint (NYSE: S) 3G network.

The new product is unlikely to help Palm, which trades at $5.42, down from a 52-week high of $19.23. For starters, the Treo will compete with another Sprint product, the well-regarded Samsung Instinct. The Apple (NASDAQ: AAPL) 3G iPhone is even more formidable competition. The fact that it sold one million units in its first three days on the market sucks a lot of demand for other products out of the market. And, why not throw in the RIM (NASDAQ: RIMM) BlackBerry.

Palm lost money last quarter. More importantly, the average price of its phones dropped sharply. Selling more handsets only helps so much when the yield-per-units is low.

The Treo may be a good product, but it comes into a crowded field that is already dominated by a few, very well-financed companies with more attractive offerings.

Why would anyone think Palm's shares would rally.

Douglas A. McIntyre is an editor at 24/7 Wall St.