Intel, Orange San Diego Smartphone Headed to U.K.

Orange in the U.K. will begin selling the San Diego June 6, a smartphone based on an Intel Atom processor. Following the Xolo in India and Lenovo's LePhone in China, it's the first Intel phone for a Western market.

Intel's campaign to join the smartphone race took a critical step forward May 31, as the Orange network in the United Kingdom exclusively introduced the San Diego, previously code-named the Orange Santa Clara, which it will begin selling June 6.

India has seen the launch of the Xolo X900, and on May 30, Lenovo introduced the LePhone K800 in China, but the San Diego marks the introduction of the first Intel phone into a Western market.

Black and round-of-edge, the San Diego runs an Intel Atom Z2460 processor, features a 4.03-inch capacitive display and supports Evolved High-Speed Packet Access (HSPA+), A-GPS and Bluetooth 2.1 connectivity. In the United Kingdom, Orange customers will also have access to the T-Mobile signal, so they can call, text and hop online in more places across the United Kingdom.

There's an 8-megapixel camera that can take 10 photos per second, in a quick burst that ensures photographers get just the right shot. The San Diego also supports HD Voice and HD Video. In an unfortunate move, Intel and Orange will ship the phone running Android 2.3, known as Gingerbread, while promising an update to 4.0, or Ice Cream Sandwich, as soon as possible.

Orange plans to charge approximately $300 U.S. for the San Diego when it's paired with a pay-as-you-go monthly plan, but will offer it free with a two-year contract.

While Intel has a hand in 80-plus percent of the PC market, the smartphone space is for now dominated by Qualcomm, and to a lesser degree Nvidia and Texas Instruments, which all license their technology from ARM. During an April 17 earnings call, Intel CEO Paul Otellini, being coy about the Xolo launch, said the move into the smartphone space marks an "important milestone" for Intel's business.

Intel has penned a number of agreements with hardware partners, including Motorola.

"We expect the combination of our companies to break new ground and bring the very best of computing capabilities to smartphones and tablets," Otellini said at the Consumer Electronics Show in January, taking the stage with then-CEO Sanjay Jha. (With Google's takeover of Motorola, Jha has since stepped down.)

In February, Patrick Remy, vice president of devices for Orange parent company France Telecom, told Bloomberg, "We are very happy about the way it came out. We really wanted to bring in this high-performance, high-speed element."

While the phone is said to be very fast, it's priced to attract first-time smartphone owners.

"I think Intel is making a mistake by entering the mobile space with an entry-level product, rather than from the high-end side," said Informa Telecoms & Media analyst Malike Saadi, according to PC World. "That risks diluting their brand."

In early 2011, smartphone sales outpaced PCs, and analysts expect tablet sales to likewise eclipse PCs well before 2020. By 2015, Mercury Research expects the market for mobile phone processors to grow by 40 percent by 2015, reaching nearly $30 billion.

Warren East, CEO of ARM, told the Dow Jones earlier this month that he expects Intel processors to grab a 5 to 10 percent share of the market by the end of 2015€”while ARM, moving into Intel's turf, will take 10 to 20 percent of the notebook PC market by 2014 or 2015.

"It's going to be quite hard for Intel to be much more than just one of several players," East said. "But they'll be a perfectly credible player."