Tesco to launch budget smartphone for around £250

Tesco is set to launch a budget smartphone to take on leading brands like Samsung and Apple.

The retailer hopes to replicate the success of its value tablet computer, the £119 Hudl, which had notched up sales of around 550,000 since its launch last September.

The smartphone to be unveiled ahead of Christmas, is expected to be priced at £250 – considerably cheaper than a top-of-the-range iPhone which costs £709, and the latest Samsung S5, costing £579.

The device would use Android operating system and come with a number of Tesco services built-in Smart and cheap.

A Hudl 2 would launch in September, while the company also planned to unveil its budget smartphone ahead of Christmas.

The cheapest 8GB iPhone 42, on a SIM-free basis carries a price tag of £348 and goes up to £709 for the top of the range 5s version, while the latest high-spec Samsung S5 is of offer for £549.

According to commentators, it seemed likely that Tesco would have to charge less than £250 if it was to make a big statement about its entry into the mobile phone market under its own name.

Though some details were revealed by the retail giant's chief executive Philip Clarke today the retailer had not released details of the specifications or the price.

Clarke, speaking on BBC Radio 5 last morning, announced the grocer's plan to release a premium Hudl smartphone by Christmas.

According to Clarke, the Hudl smartphone would be a high-end device similar to Samsung's Galaxy S5, run Google's Android mobile software and would come loaded with a full range of Tesco services, that would include Blink-box, its video streaming product.

Clarke said the opportunity in online retailing was what led the company to develop Hudl hone.

According to commentators, the retailer's  mobile devices push tied up with a number of its digital initiatives, which Clarke had been promoting as part of a recovery plan that focused on raising multi-channel sales.

The UK's biggest supermarket last month saw a 6 per cent fall in profit, with like-for-like sales down 3 per cent with budget grocery chains eating Tesco's lunch.