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Microsoft and Dell are seeing Red.

The two companies planned to announce on Friday that they were teaming up to offer three (Product) Red PCs, supporting the charitable effort that benefits women and children affected by HIV and AIDS in Africa. However, their news dribbled out early, after the New York Times' John Markoff mentioned the plans on the paper's Davos blog.

Dell plans to slather its all-in-one desktop PC, the XPS One, in red. The two are also teaming up on Red versions of the XPS M1330 and XPS 1530 notebooks, which, should be noted, were already available in red paint. The difference will be a special version of the operating system.

The PC is Red on the inside, too, with a special edition of Windows Vista Ultimate edition that includes specially themed desktop wallpaper and sidebar gadgets.

Most importantly, the two companies will donate a portion of the proceeds to the (Product) Red effort, a total joint contribution of $80 for each XPS One, and $50 for each notebook, directly to the Global Fund for each special edition PC purchased.

The move is a personal victory for Microsoft Chairman Bill Gates, who has been a big proponent of (Product) Red, but it has been Apple that has been first to the market with its (Product) Red iPods. Gates told CNET News.com at last year's CES that he was trying to get his company on board with the effort.

Dell will also offer a (Product) Red printer, the 948 all-in-one printer. Dell will make a $5 contribution to the Global Fund for each purchase.

CNET News.com's Ina Fried contributed to this report.

SAN FRANCISCO--Though he was in town to discuss Dell's new storage products for small and medium-size business customers, company founder and CEO Michael Dell also took time to answer questions about the company's main business, PC sales, which is also an area in which it's recently struggled.

Dell reiterated his company's assertion that there will be more to come of its recent dabblings in selling desktops and notebooks through retail channels.

"We're going to expand to a number of places," he said. "I would expect over the next quarters you'll see several additional key retailers" that will sell Dell products. Retailers like that the company can deliver small lots of PCs to thousands of locations, he said. Though right now the few models sold retail in the U.S. are pre-configured, he said it was "a possibility" that their retail customers might be able to build their PCs to order as well.

So far Dell has announced retail relationships with Wal-Mart and Sam's Club in the U.S., Carphone Warehouse in Europe and Bic Camera in Japan. The Wal-Mart experiment has "gone well," according to vice president of marketing Mark Jarvis, one of the other executives in town for the event. "A number of stores sold out rapidly," he said. They added that though the initial volumes shipped to Wal-Mart were not large, "a full rollout" is coming.

Dell also addressed the struggle to keep up with strong demand for two new notebook models, the XPS M1330, and revamped Inspirons. When asked what customers can look forward to from Dell for the holidays, he remarked, "I think we've excited them a little too much and demand has exceeded supply." He said they would be catching up on the glut of backlogged shipments in "the next few weeks."

On the competition front, Dell said he is "confident we will be able to grow despite consolidation" in the consumer business, referring to Acer's recent acquisition of Gateway. He added that in almost every country except the U.S. his company's presence in the consumer market is only one-tenth of its commercial presence, a difference which will provide Dell with opportunities to grow.