Dell is resurrecting its handheld business in the wake of Acer's buyout of E-TEN, market contacts have claimed. Although Dell has repeatedly denied smartphone rumors that have surfaced over the past few months, new information suggests the Texas PC maker wants to return to the Windows Mobile device market it abandoned when it cancelled the Axim last year in a bid to prevent Acer from gaining marketshare in that space. Rather than offer strict PDA-only functions, however, the new Dell handhelds would offer both GPS mapping and smartphone features.

Dell has allegedly been reviving its business ever since adding a Motorola executive in early 2007, which resulted in the end to the Axim line but also a reorganization effort inside the company. The computer builder is said to be serious enough that it has contracted Foxconn to produce any future handhelds and may even be tapping other companies experienced in manufacturing handhelds to properly handle orders.

No release schedules have been revealed for the claimed devices, which would put Dell into competition with not just future Acer devices but also other Windows Mobile device creators, such as HTC, and fellow American smartphone makers such as Apple, Motorola, and Palm.