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Report: Dell getting back into handhelds

A report says Asian manufacturers are prepping to make smartphones, PDAs, and GPS devices for the PC maker.

Rumors continue to persist about Dell getting back into the handheld business.

The latest is from Digitimes (which should be taken with a grain of salt) which is reporting that Dell has placed orders with several Asian manufacturers for smartphones, PDAs, and GPS devices. Digitimes says those devices would run Windows Mobile. That differs from the rumor floating around in late January that Dell was about to announce an Android-based handset.

As of this writing, Dell had not yet responded to requests for comment.

After axing the Axim, above, is Dell placing orders for a new handheld product? CNET Networks

It's been almost a year since the company ended production of its popular Axim handheld, and even longer since it brought on Ron Garriques from Motorola to run the company's consumer business.

So what is Dell up to? Its biggest competitors, Hewlett-Packard and Acer, both have made commitments to this product category. Acer recently showed how serious it's taking this market when it purchased smartphone and PDA maker E-Ten earlier this month for $290 million.

An industry source tells CNET that at least back in November Dell was considering devices with screens under 7 inches.

What that device is or could be isn't clear--a GPS player that does video, a smartphone that plays music? But it could be that Dell is just throwing around some ideas, trying to stake out a place in the market, sensing how active it is and will continue to be.

"The question is, what do you position in that space?" said Roger Kay, analyst and president of Endpoint Technologies. "It's likely to be a high-volume market at some point, and you wouldn't want to be left out."

Plus, Intel's new Atom processors mean that there are better options for makers of small devices. Dell could be "responding to the availability of the silicon by preparing a device," Kay pointed out.