The reason for leaving the market is that handheld sales have been pretty damn pitiful for the last year. Q1 sales are down an average of 30% across all manufacturers relative to Q1 sales in 2006.
Its pretty obvious that the rise of advanced cellphones has completely crushed the PPC market. You pretty much have to carry a phone. Carrying a PPC is a convenience for most people. And now that you can purchase a phone that either provides the functionality that you need your PPC for or is in fact a PPC itself (like a smartphone or soon the iPhone), why would you want to carry both?
I carried a PPC when I went back to complete my bachelor's. During the two years I had one, I carried an Axim. The first model I had was the X5, and after going through two of those I carried an X30. I still have that one, but the screen died on it a while ago.
The X5 was a chunky monster, but so were all of the PPCs back when it came out. Dell was just one of the boy's in the market. It was when they released the X3 that they started to pull ahead. My X30 definitely rocked. It was slim, fast, had wifi and bluetooth built in, and had a Secure Digital memory slot. I could take class notes on it, cruise the interweb, and play games to burn some time between classes.
But those days have come to an end. Dell's out of the market, which will give the other players some breathing space. But unless they start developing handhelds with cellphone capabilities, they will either go the way of Dell or start catering to specialty markets.
Another disappointing thing about Dell's leaving the market is that they aren't dumping their current stock of Axim handhelds! I think they have sold all their current stock to other companies for sale. You can find X50/X51s from 2nd party vendors, but not at Dell's site. They're still selling Palms, but no Axims. I did a cursory check and I can't even find any refurb'd Axims at Dell's outlet store. Even though Dell is out of the market, X51's are still going for $500. If they were selling their remaining stock for 50% off I'd snap one up with the quickness. RIP, Axim.