AST to Make Computer Line to Be Sold Under Dell Name : High technology: The deal between the rivals, rumored for months, focuses on portables, the fastest-growing part of the market.

Dell Computer Corp. confirmed Tuesday that rival computer maker AST Research Inc. will manufacture a line of portable computers to be sold under Dell’s name.

The deal between the two companies was rumored for months. Lisa Rohlf, spokeswoman for Dell in Austin, Tex., said the company began shipping the new AST-made portable computers Tuesday.

She said that Irvine-based AST is making the Dell Latitude computers in its Taiwan factory, and that Dell will complete final assembly of the computers and add software at its plants in Austin and Ireland.

Financial and technical fiascoes forced Dell to cancel its portable computer line last year and write off $20 million in development costs. The company stopped selling such computers in August.

But Dell officials have said they can’t afford to stay out of the market for notebook computers--those that weigh less than eight pounds and fit in a briefcase--since it is the fastest growing part of the market.

Antoine J. Tristani, analyst at South Coast Capital investment bank in Austin, estimated that Dell could sell 5,000 of the computers during the current fiscal quarter, with volumes increasing in the future.

“It will definitely enhance volume production and lower manufacturing costs for AST,” he said. “It’s a smart deal for both AST and Dell. They look like they hit the sweet spot of the notebook market.”

AST took its Bravo notebook computer line and enhanced it to come up with the model that will be marketed by Dell. Rohlf said the companies will not compete directly since Dell primarily sells its computers direct to consumers while AST focuses on various industry dealers.

The Dell machines range in price from $1,700 to $3,250.

Dell plans to re-enter the portable computer market gradually in three phases. Future models, and possibly future manufacturing partnerships, already are in the works, Rohlf said.

Dell is reportedly working with Sony Corp. for its second-phase notebook computers, which will be out later this year. Dell’s stock rose $1.75 a share to close at $22.75 in Nasdaq trading Tuesday, while AST’s stock rose $1 a share to $32.25.