Analysts have installed Dell as a favourite to buy out device manufacturer Palm as rumours surrounding a takeover continue.

Shaw Wu, an analyst at Kaufman Bros, has published a research note this week stating that after Dell seemingly failed to garner interest in its prototype handsets, it should look at the manufacturers of the Pre.

Matching up

As rivals such as Acer and Asus have started gaining a foothold in the smartphone market, Dell will need to be decisive and make a move into a similar industry area to maintain presence in the growing smartphone segment.

Wu states that Dell would help Palm through its tricky period before the Palm Pre lands, and would bring aid in distribution through its pre-existing contacts.

However, as interest in the Pre continues to grow, the stock of the company is continuing to rise as people start to genuinely believe it could be a handset to take on the desirability of Apple's iPhone.

CEO Michael Dell has spoken out recently about Dell's plans to move into the mobile phone market, stating that it "wouldn't be unreasonable" to see Dell bringing such devices to market, but it may need the boost of the once great manufacturer to help it do so.

Via Rethink Wireless