Palm has unveiled a low-cost version of its handheld device, with interchangeable colour faceplates, similar to those available for some mobile phones.

The Palm m100, which will be available in UK shops in September, marks a step up in Palm's battle with HandSpring, which also makes a low-cost device using the Palm operating system. However, HandSpring's Visor has the competitive edge in terms of upgradeability via its Springboard expansion slot, according to some analysts.

Palm's device, which costs £130, will ship with a black faceplate, with optional faceplates available in Silver Mist, Blue Mist, Green Mist, Pacific Blue and Ruby Pearl. The faceplates are expected to cost around £19 each.

In addition, the m100 includes a new NotePad application that allows users to jot down quick notes in their own handwriting on the screen. These notes can be linked to alarms that alert the user to important times and dates, transcribed into other applications, or synchronised directly to a new corresponding NotePad application running in Palm's Desktop software for Windows and Macintosh users.

The device includes Palm's Datebook application, Addressbook, MemoPad and infrared beaming applications. It also has a clock, and a HotSynce cable for connecting and sharing data between a desktop PC and the handheld.

Martin Worth, UK retail manager at Palm, said: "Consumers love to personalise their purchases, and the new m100 handheld faceplates give people lots of room to show their style, make a statement and differentiate their handheld."

Catherine Pennington, senior analyst at researcher IDC, said: "The m100 appears to be targeted at schoolchildren and students, although £130 is a lot of money for a device for children. I think it will do well with students, but they [Palm] will need to keep the price down.

"The main thing Palm needs to target is extra functionality as HandSpring's Visor has this ability with its Springboard expansion slot."

At the same time, Palm announced a tie-up with German supermodel Claudia Schiffer. According to Palm, Schiffer has been helping to design an "elegant, brushed, metallic-aqua Claudia Schiffer edition handheld" - a prototype of which was unveiled at a recent US conference.