UPDATE:Dell Enters Handset Market Through Deal With China Mobile

U.S. personal computer maker Dell Inc. (DELL) is entering the smart phone market for the first time through a cooperation deal with China Mobile Ltd. (CHL), the world's biggest mobile handset maker by subscribers.

China Mobile spokeswoman Rainie Lei said Monday Dell's handset model - mini3i - supports the company's new online platform which offers music, games, videos and other entertainment applications for download to mobile phones.

China Mobile launched the new online platform on Monday.

Lei declined to provide more specifics on Dell's handset and Dell China spokeswoman Teresa Shen declined to comment when asked about details.

Shen only said the U.S. company is cooperating with China Mobile on the development of mobile devices.

Major personal-computer makers, suffering from stiff competition and pricing pressure, have been turning their attention to a new market for growth - smart phones - which are mobile devices that offer access to e-mail and support other multimedia functions.

Dell joins other PC makers including Hewlett-Packard Co. (HPQ), Taiwan's Acer Inc. (2353.TW) and Asustek Computer Inc. (2357.TW) that have launched handsets in their efforts to diversify their product offering and launch devices that fetch higher margins.

Analysts say smart phones are a rare growth spot for the mobile handset industry this year even amid a global economic downturn.

China Mobile's open platform - an online store called Mobile Market - links handset vendors and application developers to China Mobile's users.

Mobile Market currently supports 10 handset models including devices from Nokia Corp. (NOK), Samsung Electronics Co. (005930.SE), LG Electronics Inc. (066570.SE), HTC Corp.'s (2498.TW) Dopod and Dell brands, the company said.

China Mobile's new online application platform will create more competition for China Unicom Ltd. (CHU) which has been in talks with Apple Inc. (AAPL) to offer iPhones in China.

iPhones support Apple's popular music download service called iTunes and is immensely popular in the U.S. But iTunes hasn't achieved the same popularity in Asia partly due to a plethora of local services and a lack of local content.

Analysts said China Mobile's online store would help it attract more third-generation wireless users and improve its average revenue per user.

China Mobile's announcement came after China Telecom Corp. (CHA) said in June it planned to launch an online mobile application store to attract more users to its newly launched 3G mobile service.

China Telecom spokesman William Li said Monday the company hasn't set a concrete timetable for the launch yet.

-By Lorraine Luk, Dow Jones Newswires; 852-2802-7002; [e-mail]