March 26 (Bloomberg) -- Verizon Wireless will start selling a so-called netbook as early as next quarter, stepping up competition with AT&T Inc. for the cheap personal computers, according to a person close to the project.

The devices are being developed with more than one PC maker, said the person, who declined to be identified because the project is still in progress. Price and plan details aren’t complete, the person said.

Verizon and AT&T are trying to get customers to spend more on browsing the Internet and downloading music as the pool of new phone subscribers shrinks, with more than 80 percent of people in the U.S. already using a wireless device. AT&T and RadioShack Corp. introduced a netbook that runs on the carrier’s faster, so-called third-generation network in December.

“They certainly don’t want to cede any ground to AT&T, and they’ll do whatever they have to do, certainly within economic reason, to match AT&T’s offerings,” said Christopher King, an analyst at Stifel Nicolaus & Co. in Baltimore.

The Verizon netbooks will initially be sold in the company’s stores, and retail partners also may stock them, the person familiar with the situation said. AT&T, based in Dallas, sells netbooks from Acer Inc. and Dell Inc.

Customers would probably pay about $100 for the machines, with Verizon subsidizing the rest, or about two-thirds of the cost, King said. The analyst advises investors to buy Verizon Communications Inc. shares and doesn’t own any.

Basic Functions

Netbooks are scaled-down versions of laptops that typically sell for less than $500. Sales of netbooks, which perform basic functions such as Web-browsing, will almost double this year, even as the total PC market shrinks 12 percent, researcher Gartner said this month.

Hewlett-Packard Co. and Dell are the world’s largest PC makers. Dell spokesman Bob Kaufman didn’t return phone or e-mail messages seeking comment.

“It’s natural for carriers the world over to be interested in H-P’s broad portfolio of thin and light minis,” Kevin Frost, general manager for consumer notebooks at Hewlett-Packard said in an e-mailed statement. “We are talking with carriers all over the world.” He declined to comment on Verizon’s netbook plans specifically.

Verizon spokeswoman Brenda Raney didn’t return a call seeking comment. Verizon Wireless, based in Basking Ridge, New Jersey, is a joint venture between Verizon Communications and Newbury, England-based Vodafone Group Plc.

Verizon Communications rose 39 cents to $30.54 in New York Stock Exchange composite trading at 4 p.m. The shares have dropped 9.9 percent this year.

Verizon’s plan to introduce netbooks was reported earlier today by TheStreet.com.

To contact the reporter on this story: Amy Thomson in New York at athomson6@bloomberg.net

Last Updated: March 26, 2009 17:19 EDT