Oh, what a difference a few months makes. Back in December, when I teamed with David Gardner to recommend palmOne (NASDAQ:PLMO) for Stocks 2005, the company was earning raves for its Treo and still dominating the maturing but still relevant market for personal digital assistants (PDAs).

Fast-forward to now. Apparently desperate to regain its standing, yesterday palmOne introduced LifeDrive, a new PDA that can do just about everything but cook a meal. It certainly looks sexy. It's also pretty functional. But palmOne is billing the new handheld as an alternative to Apple's (NASDAQ:AAPL) iPod, and even as a laptop replacement. Really? Look, I like palmOne, but let's be serious. There's little chance that the LifeDrive will displace the iPod or my PowerBook. But I can't blame the company for trying.

Market researcher Gartner (NYSE:IT) says that the PDA market during the first quarter grew 25% over the same period a year ago, but palmOne was no longer the market leader. Rival Research In Motion (NASDAQ:RIMM) shipped more units, grabbing the top spot with more than 20% of the market while palmOne dropped to 18%, a level it hasn't seen since the mid-'90s. The LifeDrive is its first attempt to regain the title of king of the PDA hill.

So, is palmOne's stock still a buy? In a word: Yes. Global demand for smartphones is expanding at a phenomenal pace, and the Treo 650 remains at the top of the heap in terms of functionality and usability. Sure, Nokia's (NYSE:NOK) varying models give it anywhere from 40% to 50% of the global market. But palmOne doesn't need to dominate the market to earn outsized returns for investors. It just needs to show up -- and play a little better than it has in recent months.

Let's chalk up the LifeDrive to what it is: a cool gadget that needn't distract investors. It's the Treo -- and really, only the Treo -- that's worth watching.

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Fool contributor Tim Beyers can't imagine ever having a PDA again now that he has a Treo 600. What's your take on the LifeDrive? Share your thoughts with other Fools at the palmOne discussion board. Tim didn't own shares in any of the companies mentioned in this story at the time of publication. You can find out what's in his portfolio by checking Tim's Fool profile, which is here. The Motley Fool has a disclosure policy.