New York — Palm is debuting two new handhelds in time for the holiday selling season, including its first color PDA for $99 and it first Wi-Fi model to break the $300 price point.

Palm is also eliminating the Zire and Tungsten brands and simply using letter designations “Z” and “T.”

The new Z22 is Palm’s smallest and lightest low-end PDA to date, at 3.4 ounces. It will replace the black-and-white Zire 21 at the same price point, while adding photo viewing; non-volatile memory, where data is protected even if the battery runs down; a mini-USB cable for desktop synchronization; and a boost in memory and processing speed to 32MB and 200MHz, respectively.

Palm said it was so successful in courting first-time buyers with the original Zire, having sold 1 million units in the first seven months it was offered, that it is hoping to duplicate that effort and attract additional newcomers with a leader-priced color model. To give an idea of the potential market remaining, the company said the paper planner market totals $1 billion annually, with some planners costing over $70.

Also to that end, the company includes games on the Z22 and bundles software for applications such as tracking auto maintenance and an eBook reader with three books.

Palm's Z22 is the company first PDA to offer a color screen at $99

At the higher end, Palm is launching a new Palm T/X featuring “affordable Wi-Fi.” According to the company, 100 million people worldwide will be using Wi-Fi by 2006 and 12.5 million U.S. homes have Wi-Fi at present. The feature is also the most requested among previous Palm owners, said the company.

The new T/X also offers built-in Bluetooth, a high-resolution screen at 320 by 480, 128MB of flash memory and a 312MHz processor. The unit allows photo and video viewing and includes Pocket Tunes for MP3 support. It has expansion slots for MMC/SD and SDIO expansion cards.

Palm said the T/X will ship loaded with a music video by Jake Coco, called “Graceland.”

Some of the new applications available for Wi-Fi-based PDAs (but not bundled with the T/X) include File Access by Avvenu, which lets you remotely access files on your PC from your Palm PDA, and also MobiTV, which offers access to TV-quality content including news, sports and entertainment on a PDA.

Palm also announced that the Tungsten E3 has been reduced in price to $199 from $249.