Everything Everywhere has unveiled the Europe’s first “Intel Inside” smartphone.

The San Diego handset is powered by Intel’s single-core Atom Z2460 processor and runs Google’s Android system.

The new smartphone was manufactured by the Chinese firm Gigabyte, but will be marketed under EE’s Orange brand.

The launch marks Intel’s entry into a market dominated by chips based on designs by British firm Arm Holdings.

The new smartphone will go on sale in the UK and France next week. There has been no announcement as yet for other markets.

The handset is the third Intel-based smartphone, following the launch of Lava’s XOLO X900 in India in April and the Lenovo LePhone K800 in China on Wednesday.

The new smartphone was manufactured by the Chinese firm Gigabyte, but will be marketed under EE's Orange brand

Intel has also partnered with Google’s Motorola Mobility division with devices scheduled to launch in the second half of the year.

Sales of mobile devices are growing at a much faster rate than PCs and some analysts believe the dividing line between the two sectors will blur, so success could be critical for Intel’s future prospects.

“This is part of our strategy to grow into what we refer to as adjacent markets, whether that be premium high performance smartphone products in the mature markets or lower cost solutions in some of the emerging markets, and everything in between,” said Graham Palmer, Intel’s country manager for the UK and Ireland.

“This is absolutely a core part of Intel’s strategy to allow us to take our technology into these new growth sectors.”

Intel and EE are co-funding a multimillion pound marketing campaign – the first to promote an Orange’s own-brand device on television.

Despite the big budget the handset is not targeting the top end of the market.

It has a 4.03 inch (10.2 cm) screen – smaller than HTC and Samsung’s top-end Android models – and runs the Gingerbread version of the system software, rather than the newer Ice Cream release.

Intel said the single core CPU (central processing unit) on its chip outperformed many dual core models on the market, but admitted it would be beaten by recently released handsets featuring quad core technologies.

However, it also sold for a cheaper price: $320 for the pay as you go option.

“It’s not about going head-to-head with a [Samsung] Galaxy S3,” said Paul Jevons, director of products and devices at Everything Everywhere.

“In targeting those customers who may be new to smartphones and are at a different point in the market we are able to meet an unsatisfied need.”