Dell (Quote, Company Info) officially announced its entry into the handheld PDA market, lifting the wraps off a pair of Axim X5 devices running on Microsoft's Pocket PC 2002 software.

Dell's PDA plans, leaked in the press in recent weeks, puts the PC maker right in the Pocket PC thick of things, forcing market leader Hewlett Packard (Quote, Company Info) to release two new iPAQ models -- one matching Dell's $299 price point.

HP's iPAQ h5450

Even as the two powerhouse PC makers get set to duke it out in the PDA space, analysts aren't expecting a price war between Dell and HP. "Dell's pricing is very aggressive. They will definitely take away some business from HP. By the end of next year, Dell will be selling about 600,000 units and the chunk of that will come from HP's market share," said Aberdeen Group analyst Peter Kaftner.

"I don't expect HP to match Dell's aggressive pricing. People looking for a bargain will turn to Dell. But, that doesn't mean HP is giving up. With today's announcement of a high-end device for enterprise clients, it's clear HP will be a big part of this race," Kaftner told internetnews.com.

The Palo Alto, Calif.-based HP on Monday released two new Pocket PC devices - the low end ($299) IPAQ h1910 and the iPAQ h5450, a high-end device that integrates biometrics security, WLAN network access (802.11b) and Bluetooth wireless capabilities.