Palm Inc. released the first PDA in its new consumer-oriented Zire line this weekend, a $99 Palm OS device that the company hopes attracts the legions of technophobes who are still using paper-based personal information management solutions. And unlike previous low-cost PDAs, Palm says it can actually make money on the Zire, despite its bargain-basement pricing.

"Zire is about growing the market and providing an upgrade base in which to sell future Palms--and doing so profitably," says David Christopher, the senior director of product management at Palm. To that end, the Zire is a small, attractive white device, featuring just 2MB of RAM like previous low-end Palms, rechargeable batteries, and a USB interface for the PC. And to get more Zires in retail locations, Palm has switched the product to a small clear plastic package that can be hung on a hook. Palm says the Zire will be sold in office supply stores as well as the usual consumer electronics outlets.

In addition to its low-end grab with Zire, Palm is also targeting the enterprise market currently dominated by Microsoft's Pocket PC line. On October 28, Palm will unleash its first Tungsten products, running on the new Palm OS 5, aimed at mobile professionals and technology enthusiasts.