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The company's m505 personal digital assistant (PDA) has been reduced by $50 (£34) to $399.
Customers who buy m125, m500 or m505 handhelds will get a 16Mbyte Secure Digital (SD) expansion card and coupons for other accessories.
The promotion applies to devices bought between 1 November and 7 January 2002, and includes coupons from companies such as Intel and Hewlett-Packard. The offer is valid in the US, Puerto Rico, the US Virgin Islands and Canada.
The price cut on the m505 is the latest in a long series of cuts by Palm and competing Palm operating system device maker Handspring.
Palm is also facing tough competition, particularly on its high-end devices, from PDAs running Microsoft 's Pocket PC operating system.
Compaq, Hewlett-Packard, Casio and Toshiba all offer devices running Pocket PC, while Sony offers its own PDA, the Clie, which runs Palm's operating system.
A study on the handheld market in Europe said that while Palm's sales dropped by 56% in the third quarter of this year, competing vendors actually saw an increase in sales.
Nokia sold nearly twice as many of its 9210 Communicator devices, compared with the same period last year, while Compaq saw its unit sales increase by 81%.
Nokia is now the market leader with 28.3% of the market, while Palm's own share dropped to 20.2%, according to the study