Handheld maker Palm has taken a stake in a company that hopes to make millions of low-cost digital cameras and portable printers in its factories in China. Palm has invested in Milpitas, California-based SiPix, which said Monday it has completed a $100 million round of funding in advance of its launch next month of a line of low-cost digital cameras. SiPix is also working on a pint-sized thermal printer that can be used with handhelds that use Palm's operating system. A thermal printer uses heat to transfer images to special paper. A Palm representative confirmed that the Santa Clara, California-based company has a stake in SiPix but did not disclose the size of its investment. The representative said the nearly 2-year-old SiPix has technology of interest to Palm, but did not offer details. Palm has taken a stake in several companies since announcing its Palm Ventures fund in September. Last week, the company announced an investment in ePhysician. The idea of a portable printer is not new. There was a thermal printer, similar to a cash register printer, available more than a decade ago for the Sharp Wizard personal organizer. However, the thermal printers did not prove terribly popular. IDC analyst Ron Glaz said that even though portable printers have not been popular historically, the interest in such a device might be greater today. "Back in the 80s there really wasn't any need for paper," Glaz said. "With handheld technology becoming also wireless, there is an increased need for being able to print." In addition, SiPix is working on several digital cameras, including some that can function as PC Web cameras. Although such products are abundant, SiPix president Dan Ting said his company can deliver better value. "We believe we can build the products at a much lower price," Ting said. The company hopes to produce 1 million digital cameras per month by the end of the year. It already has factories in Zhuhai and Shanghai, China, and is building a new, larger facility also in Zhuhai. Glaz said that the biggest challenges for SiPix will be to create a presence in the distribution channel and to build a brand name for itself. "It's not that difficult," Glaz said. "It's just a question of, 'Do you have enough money?'" Glaz noted that the company appears to be off to a good start, with funding from Palm, Goldman Sachs, CitiCorp Capital, Worldview Technology Partners, Baring Private Equity Partners and Telligent Investment Management. SiPix executives said they know they may not become a household name overnight. "We understand it will take a little time," said Tenny Sin, a former executive at scanner maker Umax who joined SiPix last month as vice president of sales and marketing. Have your say instantly, and see what others have said. Click on the TalkBack button and go to the ZDNet News forum. Let the editors know what you think in the Mailroom. And read what others have said.