Dell plans to build a smartphone using Google's Android software for AT&T, marking the PC maker's first entry into the competitive U.S. handset market dominated by Apple and Research in Motion.
The Round Rock, Texas-based company is expected to launch a U.S. version of its Chinese "oPhone" -- a touch screen device with built-in camera, similar to Apple's iPhone -- as soon as early as next year.
It will use Android to run applications such as a Web browser, music player and games.
Dell is also talking to other U.S. carriers, including T-Mobile, about offering the device.
With the AT&T deal, all four major U.S. carriers will carry smartphones using Google's fledgling operating system, a boost to the Internet giant's attempt to compete with Apple's and Microsoft's platforms.
After a slow start, Android has been gaining some traction in recent months. On Tuesday, it said it was partnering with Verizon to co-develop multiple devices based on Android and bringing two phones to market this year.
Earlier this week, Samsung also said it would sell the Moment through Sprint and the Behold 2 for T-Mobile.
Other Google devices include Motorola's recently announced Cliq and HTC's Hero, slated for release on Sprint next week.
Dell's revenue has dropped due to lost PC market share to rivals. In 2007, founder Michael Dell returned as chief executive to reverse the fall with a plan to expand the company out of PCs into lucrative new devices like smartphones.
Although the company has been secretive about its plans, last August, it announced it would develop handsets for China Mobile, China's largest carrier.
