Standing next to Paul Otellini (right), president and chief executive officer of Intel Corp, Liu Jun, senior vice-president of Lenovo Group Ltd, holds a Lenovo K800, the first smartphone powered by Intel chips, during the Intel presentation at the 2012 International Consumer Electronics Show in Las Vegas.[Photo/ Bloomberg]

Device to be carried on country's second-largest telecom network

LAS VEGAS - The first smartphone equipped with a chip made by the technology company Intel Corp will go on sale in China in the second quarter of the year.

Lenovo Group Ltd - the largest PC maker in China and second-largest in the world by sales - made that announcement on Wednesday at the 2012 International Consumer Electronics Show in Las Vegas.

China is the largest market for smartphones and is expected to see more than 100 million smartphone shipments this year, according to the US-based research company IHS iSuppli Corp. Lenovo's K800 smartphone is to come equipped with an Intel chip, marking the first time Intel has provided one of its devices for such a product.

For years, the Silicon Valley giant, whose chips are mainly used in personal computers, has struggled to move into the smartphone business.

Almost all smartphones and tablet PCs use chips from Qualcomm Inc, Broadcom Corp and similar companies. The designs for those chips often come from the British technology company ARM Holdings PLC, which is known for making products that have low energy consumption, helping batteries in Internet mobile devices last longer.

"The best of Intel computing is coming to smartphones," said Paul Otellini, Intel

president and CEO. "Our efforts with Lenovo and Motorola Mobility will help to establish Intel processors in smartphones and provide a solid foundation from which to build in 2012 and into the future."

According to iSuppli, the majority of smartphone shipments in China in the past few years were for the country's domestic market. But that is expected to change; experts believe about half of all smartphone shipments in 2015 will be exports.

"This new partnership means Lenovo, a Chinese company, is trying to attract customers by combining its strength in making PCs with the production of smartphones," said Wang Jiping, a senior analyst with the research company IDC China.

Liu Jun, Lenovo senior vice-president and president of the company's Mobile Internet and Digital Home Business Group, joined Otellini at the consumer electronics show to introduce the Lenovo K800 smartphone, which contains Intel technology and runs on Google Inc's Android operating system.

Liu said the smartphone will be available in China in the second quarter of the year and will run on a network operated by China Unicom Ltd, the second-largest telecommunications carrier in China.

"We sold 6.5 million phones this past quarter, half of which were smartphones," said Yang Yuanqing, CEO and president of Lenovo.

This year, Chinese makers of mobile handsets are expected to nearly double the number of products they ship, bringing it to more than 100 million.

Beyond Lenovo, Motorola Mobility Holdings Inc plans in the second half of the year to release smartphones that also feature Intel Atom processors and use the Android operating system.

Intel said its partnerships with makers of mobile Internet devices will also concern tablet PC products and that its smartphones will be sold in more countries and regions.