Dell Prepares Move Into Cell Phones: Report

Updated from 12:30 a.m. EST

Dell is preparing a move into cell phones as early as next month, the Wall Street Journal reports, citing people familiar with the matter.

The computer 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, according to the newspaper. They produced prototypes built on Google's(GOOG Quote) Android operating system and Microsoft's(MSFT Quote) Windows Mobile software.

The Journal reports Dell is focusing on so-called smartphones, higher-end devices that include features such as Web browsing and email, including one with a touch-screen similar to Apple's(AAPL Quote) iPhone.

Dell is trying to increase its sales as its mainstay personal-computer business struggles in the recession, the Journal reports.

Shares of Dell slid Thursday on news that $280 million in expenses related to restructuring efforts and stock-option expenses would cut deeply into its fourth-quarter results.

Dell closed down 4.5% to $9.50 Friday.