Palm will unveil its second WebOS phone this week, which goes by the name “Pixie,” sources told Mobile Crunch.

According to the report, the grand debut will take place this week at New York's Fashion Week that kicks off on Thursday, September 10.

The new phone is said to have the same operating system as the Palm Pre but will be much lower priced ($99).

To date, Palm has neither confirmed or denied whether a new Palm phone was in the process of development.

According to Engadget, below are the purported specs:

Dimensions: 10.6×55x111mm
Weight: 100 grams
2.63″, 320×400 capacitive touch screen
4GB of internal memory
Tentative price of $349 before rebates. Our sources are indicating that the target price point is $99 after all is said and done.
2MP camera, fixed focus, with flash
Bluetooth 2.1 w/ A2DP and EDR, USB 2.0 via micro USB
1150mAh battery, removable
SMS, MMS, built-in IM client
WAV, MP3, AAC, AAC+ ringtones, MPEG4, H.264, H.263 video playback.

Once again, Palm plans to unveil their handset just ahead of Apple. When the Palm Pre rolled out earlier this year, it was just days ahead of the iPhone 3Gs. Tomorrow, Apple is holding a major event that will likely focus on new iPod Touch features.