Dell may be giving another go in the mobile handheld device marketplace, according to a speculative report published by the Wall Street Journal yesterday. According to unnamed sources, the planned device would run on Google Android and operate as an Internet-only device similar to Apple’s iTouch.

Currently Dell is not commenting on the matter, but if reports are true, this will be Dell’s first foray into the handheld market since yanking its Axim line of handhelds off the market in 2005. At the time, Axim had been on the market for five years with lukewarm reception from customers. Those who did purchase Axim handhelds often said they enjoyed the form factor but complained of poor support from Dell.

Resource Library:

Since Axim’s desmise, however, the mobility market has transformed greatly, says Charles King, principal analyst for Pund-IT.

“It’s a different world today and I think if you look at what is happening in mobility now both with netbooks and then these emerging product categories, what you would call mobile internet devices (MIDs), I think it makes great sense for Dell to consider how they might be able to play there,” King says.

The channel could also help Dell’s new device get over the hump that Axim could not. When Dell pulled the last handheld, it was just ramping up its channel strategy after years of strictly direct selling to customers. Now that the company has had time to tweak its approach with VARs and to enter the retail channel, things could be different for the company.

This could especially be true if Dell could figure out a way to develop an MID that appeals to business users, something that not even netbook developers have been able to do well thus far, King says.

“It really depends on what type of market that they're after with this thing or the type of target audience they're after. You know, Dell on the consumer side remains largely a direct seller but they do have an increasingly active business channel,” King says. “If Dell decided to make a business-centric device, I think that could fit well within the company's channel strategy and create some interesting opportunities for the channel partners that Dell works with.”