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Palm cuts handheld prices

Palm Computing drops prices on several models, bringing the entry-level PalmPilot to under $150 for the first time.

Palm Computing has slashed prices on its lower-end handhelds, bringing the entry-level PalmPilot to under $150 for the first time.

3Com's Palm Computing today announced cuts on several models, including the Palm III and PalmPilot Professional Edition handheld organizers. Palm discounted the Palm III from $299 to $249, while the Palm Pilot Pro, which is no longer being manufactured and is only available as supplies last, was cut from $199 to $149.

International Data Corporation has pegged Palm's market share in handhelds at 72 percent, with 3 million devices shipped to date. Palm competes with Microsoft and partners Casio, Philips, Hewlett-Packard, and others, which manufacture devices based on the Windows CE operating system.

These price cuts should boost Palm's competitive advantage. Palm devices are significantly less expensive than comparable Windows CE devices. Newer palm-size PCs running CE retail for between $300 and $500, while entry-level devices hover around $250.

Although Palm has a history of cutting prices preceding new product roll-outs, a company spokesman attributed the discounts to robust sales. "As sales continue to increase so rapidly, volume manufacturing leads to reduced prices," he said.

Palm is not cutting prices on its newer Palm IIIx and Palm V models, which were introduced in February. The Palm IIIx sells for $369, while the Palm V is priced at $449.