Dell Inc., aiming to rev up sales as its mainstay personal-computer business struggles in the recession, is preparing a move into cellphones as early as next month, said people familiar with the matter.

The Round Rock, Texas, company has had a group of engineers working on the phones for more than a year from an office in the Chicago area, these people said. They produced prototypes built on Google Inc.'s Android operating system and Microsoft Corp.'s Windows Mobile software, these people said.

Dell is focusing on so-called smartphones, higher-end devices that include features like Web browsing and e-mail.

One model includes a touchscreen but no physical keyboard, like Apple Inc.'s iPhone. Another is a slider-style phone with a keypad that slides from beneath the screen, one person familiar with the devices said.

Dell hasn't finalized its plans and may still abandon the effort, which would pit it against such powerhouses as Apple and Research In Motion Ltd.

A Dell spokesman said the company hasn't disclosed plans to offer phones, adding: "We haven't committed to anything."

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