Even though Dell had a tough first quarter, it is sitting on nearly $10 billion in cash and equivalents and is "looking for opportunities" to expand its business through acquisitions, according to a Dell executive.

The executive quoted in the IDG News Service article is Steve Felice, president of the company’s small and medium business unit. Felice refused to name the companies under consideration, but the article said unnamed observers believe that Palm or Acer are potential targets.

Michael Dell recently said that his company is interested in "smaller-screen devices", which could mean smartphones or some other sort of mobile device. Palm is getting ready to launch its new smartphone, the heavily hyped Palm Pre, and Acer has a strong netbook line as well as a huge footprint in the PC market.