Intel, the world's largest chipmaker, has quashed speculation that it will lose out to rival technology manufacturers as mobile browsing becomes more popular, by launching a smartphone.
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Analysts have predicted that Intel will lose market share to competitors more focused on mobile devices, which are fast becoming the most popular way of accessing the internet.
But Intel has returned to the handset market after four years by unveiling a smartphone at the Consumer Electronics Show (CES) in Las Vegas.
The move will spark a battle for market share with wireless chipmakers such as Qualcomm, according to the Financial Times.
Qualcomm, Freescale and Marvell Technology Group are among the Intel rivals that have demonstrated new mobile devices at the 2010 CES with the aim of persuading people to ditch their Intel-powered personal computers as the main way of going online.
The Korean made LG smartphone unveiled by Intel chief Paul Otellini at the CES uses a new generation of lower power Atom processors codenamed Moorestown.
The smartphone, which will go on sale in the second half of 2010, boasts a 3D interface and can display high-definition video.