Eight years ago I was the chairman of a conference titled Planet PDA where I got to see the early innovation in the market which later became widely deployed in a slew of consumer electronics devices. Back then, Palm and Treo were separate companies and Microsoft was coming on strong with what became Windows Mobile.

My gadget of choice at the time was a Palm 7, a wonder of a PDA which allowed data access via an integrated wireless chipset. A number of websites designed Palm 7 versions and the device was very useful and far ahead of its time.

Later the iPaq was launched by Compaq and a slew of other devices were made from companies like Toshiba and NEC.

A confluence of events took place to severely injure the PDA market. The first was the emergence of smartphones which did what the PDA did but even more. A PDA suddenly became a device which wasn’t as necessary. When HP acquired COMPAQ it seemed the emphasis shifted away from PDAs as well.

The straw which really broke the camel’s back however was when Dell partnered with HTC the company behind the iPaq and came out with the Axim, a PDA priced far less than the competition.

At this point, my contacts at the hardware companies saw the writing on the wall. You see, prior to this time, the fat margins on these devices allowed the companies to have partner programs where they worked with software developers to come out with new and innovative applications which in turn would drive the high-margin devices.

When this abruptly ended, so did the push to get new application developers for handheld devices.

I was reminded of this story for a few days as I have heard the rumors of Dell coming into the smartphone space. I believe Dell is doing the right thing but the company is not as influential as it once was and doesn’t have the market power it used to. In addition, it is obvious that Apple, HTC and RIM are the companies to watch in the smartphone space.

If you are a smartphone manufacturer, pay close attention to what Dell does, as history does have a habit of repeating itself.