Dell said on Thursday it plans to start selling personal computers through Wal-Mart Stores in North America next month, breaking from a 23-year model of direct sales as it tries to rekindle business. Dell, which called the move a "first step" into the retail market, will start selling the computers bundled with accessories for under $700 starting June 10.

The world's largest retailer will sell two models of Dell's Dimension multimedia desktop computer, which are now available directly from the computer maker.

Dell is expanding in retail stores to compete better with Hewlett-Packard, which has overtaken Dell as the world's No. 1 PC maker, partly through a strategy of selling in the United States through major retailers such as Wal-Mart, Circuit City Stores and Best Buy.

The combination of Wal-Mart, famous for low prices, and Dell's Dimension desktops, the company's lowest-priced consumer models, may deter some upscale buyers, said J.P. Gownder, an industry analyst at market researcher Forrester Research Inc.

Dell's retail expansion comes after Taiwan's Acer the world's third-largest PC maker, began selling PCs at Best Buy, Circuit City and Wal-Mart.

China's Lenovo Group Ltd. also said last month it planned a new consumer business unit as it faces stiff competition from HP, Dell and Acer.

Dell plans to add additional retailers in its top 10 to 15 markets, including Britain, Germany, France, Japan, China, Brazil and Japan.