Palm has produced two new PDAs, aimed at the bottom end of the market.

The Palm TX and the Palm Z22 will make computing more affordable for a wider variety of customers, said product line manager Raj Doshi.

The TX costs $299 with around 100MB of Flash memory and an integrated Wi-Fi chip, while the Z22 costs $99 with a color screen and 20MB of Flash.

Palm's customers have been clamoring for more PDAs with Wi-Fi, according to Doshi. But the company has an odd Wi-Fi strategy. Its popular Treo smart phones do not come with Wi-Fi, much to the consternation of analysts and Palm enthusiasts, while the TX will become the second PDA to feature an integrated wireless networking chip.

Palm believes that PDA users tend to stick close to Wi-Fi networks in their home or office, while Treo users are on the road more frequently away from Wi-Fi hotspots, Doshi said. While Treo users visit their homes and offices on occasion, many analysts believe that the cellular carriers that sell the Treos are more interested in keeping those users connected to the Internet on pricey cellular network connections, rather than free Wi-Fi connections.

Still, Palm is fulfilling the wishes of users for more PDAs that can connect to the Internet with the release of the TX. PDA shipments have been in a freefall for several years, as mobile phones have become more powerful and capable of handling contact and calendar information.

However, while PDAs that can connect to the Internet retain their appeal, potential users of the TX will match it up against other PDAs running Windows Mobile from companies like HP and Dell, said Gartner analyst Todd Kort. "This will be Palm's most credible Wi-Fi product to date. But it's kind of late in the game when you've got an OS that is obviously not going to be upgraded," he said.

The future of the Palm OS is up in the air after developer PalmSource was acquired by Access, and PDA users looking to spend $299 might prefer to buy a product with an OS that will evolve over time, he said.

The Z22 is targeted at those individuals who have yet to give up their leather-bound paper organizers, Doshi said. At $99, the Z22 is cheaper than buying a paper organiser and refilling it every year with the new calendar. It also comes with a nice colour screen.

Palm has a good chance of attracting people who have never used a PDA with the Z22, Kort said. "They are trying to remove the intimidation factor that people associate with a PDA. It's something that is appropriate for students who don't need to connect to Wi-Fi."