Will Dell buy Palm and start selling smartphones

File this in the “rumours” section for now but according to some reports Dell might be about to buy Palm to kickstart a move into the smartphone market.

Dell is stopping selling its Axim range of PDA’s and analysts are convinced that the PDA is dead and that the smartphone is taking its place.

The decision by Dell to discontinue the Axim line is a good example of the demise of the personal digital assistant, or PDA, an analyst at J. Gold Associates, Jack Gold, said.

“The PDA is dead. Long live the smart phone,” he said.

The Axim decision has been predicted for some time, Gold said, and Dell was likely to introduce a smart phone later this year. It might also purchase Palm to make it happen.

Palm itself sold PDAs, but they were a minority of Palm’s sales, Gold said.

HP’s iPaq PDA has become a smart phone as well, he noted.

“Dell has the money to buy Palm, and it’s clear now that Motorola is not buying Palm,” Gold said.

Dell could build a smart phone or buy an established player. Palm already has a line of four smart phones that are built on both the Windows Mobile and Palm operating systems.