They've got to be versatile if they can have a hope to at least challenge Windows Phone, much less dethrone Android/iOS. I also suggest they sell any device that they themselves make under the Palm brand. Go back to your roots!
For one thing, the PDA market right now is basically the iPod touch. Certainly smartphones and tablets are hotter properties, but the former market is saturated (and I wonder if the recent report from WHO will lead to a consumer hysteria backlash against cell phones), and the tablet market is still nascent. PDAs are more compact, anyways.