DigiTimes is reporting Toshiba will launch a new $199 Pocket PC next month. Toshiba believes the aggressively priced handheld device could help boost PDA sales and better compete with rivals Dell Computer and HP which have launched similar models with higher price tags.

You'll remember last year when Toshiba was really the first vendor to build a sub-$400 Pocket PC. It looks like they are taking the next step and going for the under $200 market.

They have apparently contracted Compal Electronics to produce the e350 Pocket PC, which will feature an Intel 300MHz PXA 250 processor, 64MB SDRAM and a semi-transmissive TFT LCD panel, according to sources.