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Tesco to tout its own smartphone – now THAT'S an unexpected item in the bagging area

Kit-Kat (Android) in the technology aisle?

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Tesco is preparing to launch its own high-end smartphone later this year, chief executive Philip Clarke revealed today.

The Android mobe will follow on the heels of the successful Hudl tablet; has UK's biggest retailer was able to shift 550,000 units of its own-brand cut-price 7-inch slab. A new version of the Android tablet, the Hudl 2, will be launched in September, we're told; the new Tesco phone will go on sale by the end of 2014.

While the tablet is an unashamedly low-end device, the promised smartphone will be targeted at the high-end and come with Tesco apps for buying groceries and clothing, managing a vid-streaming Blinkbox and doing online Tesco banking. Clarke told BBC Radio 5 Live this morning that customers will have a Tesco current account linked to their phone.

He also said Brits will be able to scan and pay with the smartphone – but as previously noted, Tesco isn’t going near NFC anytime soon. There are no confirmed specifications available at this time.

The company is in a unique position as a retailer, financial institution and virtual mobile network operator with a huge amount of consumer data harvested through its Clubcard.

Clarke is looking to “multi-channel retailing” as a way to fight back against the budget supermarkets that have helped nudge Tesco's market share to a ten year low.

At the end of last year, Tesco broadband boss Anthony Vollmer took charge of Tesco Telecom along with the retailer's virtual mobile network (MVNO) and 200 phone shops. With more than three million subscribers, the MVNO is one of the biggest in the UK but its age demographic is mostly folks of an older generation – the biz used Ronnie Corbett in TV adverts.

The launch of a high-end own-label phone and the recent announcement of not charging a premium for 4G looks set to target younger, higher-spending users, particularly through services such as Blinkbox. Depending on the final price tag, the Tesco mobe could give the UK phone market a bit of a welcome shock, too. ®

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