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Intel reaches for China's high-end market with new Lenovo smartphone

Lenovo has announced the availability of a smartphone built around Intel's chips

Intel announced on Wednesday the availability of another smartphone built around its processors, this time in China. But the high price of the new Lenovo LePhone K800 could make it a tough sell in the country, where many consumers are buying low-cost smartphones, according to an analyst.

The launching of the phone by Lenovo marks further progress by Intel to break into the smartphone processor market, which has currently been dominated by ARM chips. In April, Intel's first smartphone became available in India, built from handset manufacturer Lava International. Motorola has also said it plans to use Intel chips in its smartphones.

The LePhone K800 is now available for sale in the country, going for a price of 3,299 yuan (US$520) without a contract. The K800, which was unveiled earlier this year at the Consumer Electronics Show in Las Vegas, uses one of Intel's latest chips, code-named Medfield, and promises to bring long battery life and fast processing speeds to the phone.

The LePhone K800 is built with a 1.6GHz processor, along with a 4.5-inch touchscreen that can play video at 720p resolution. The smartphone uses Android 2.3.7, has 16GB of internal storage, and features a rear-facing 8 megapixel camera, and a front-facing 1.3 megapixel camera.

The LePhone K800 is arriving in China as the country has become the largest smartphone market by shipments, according to research firms. In April, Intel China chairman Sean Maloney said the company aims to win in the Chinese market for tablets and smartphones.

Intel's new Medfield chip is competitive with ARM chips in terms of power consumption and processing speeds, said Teck Zhung Wong, an analyst with research firm IDC. But the LePhone K800's price may put it out of reach of most Chinese consumers, many of whom are buying smartphones at a price of 1500 yuan or lower.

Intel's goal with the LePhone K800 may have been to create a flagship phone to fully demonstrate its capabilities, Wong said. "But due to the price point, I'm a little bit concerned," he added. "The market is flooded with low-cost Android phones. For the (K800) device to do well, they'll have to put a lot of marketing behind it."

Lenovo, best known as a PC maker, also sells smartphones in China, and has used a low-pricing strategy with its devices in order to compete. The company had a 7 percent share of China's smartphone market in the first quarter of this year, down two percentage points from the previous period, according to IDC.

With the LePhone K800, Lenovo is moving up its price range, and offering a wider variety of smartphone products, Wong said. But both Intel and Lenovo will have to work to ensure the new phone has a smooth launch.

"I think it's important that this phone come out with no hiccups," he added. "The first iteration of a device can run through hiccups, so I hope this doesn't happen."


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