Treo sites are abuzz this morning with blurry images of the Treo “Hollywood”, the next rumored device from Palm. I slated Motorola a bit during CTIA playing out the RAZR trend, and I think Palm faces a similar issue.

They’ve been talking for a few years about how smartphones are their core business, and that they’d release a range of Treos, which really have failed to materialize. The Treo 650 was an incremental upgrade to the 600 model — which was developed by Handspring before PalmOne bought them — while the Treo 700w featured a change of OS, but little in the way of hardware or form-factor innovation. The Hollywood really doesn’t either, though Palm appears to have finally caught on that maybe people really don’t like stubby external antennas after all.

The Treo hasn’t made a dent outside the US, and Palm on one hand seems content to maintain its fanboy customer base (though it’s alienated some of them by adopting Windows Mobile) and not make a serious effort to grow its business beyond these enthusiasts. Will the Hollywood do that? Probably not — it looks like little more than an incremental upgrade to the 700w.