It hopes to replicate the success of its value tablet computer, the GBP119 Hudl, which has chalked up sales of around 550,000 since it was launched last September.

The smartphone, which will be unveiled ahead of Christmas, is likely to have a price tag of around £250 (Dh1,560) — considerably cheaper than a top-of-the-range iPhone, which costs £709 (Dh4,420), and the latest Samsung S5, which costs £579 (Dh3,600).

Tesco chief executive Philip Clarke yesterday announced the launch, but he did not reveal the price. A Tesco spokesman confirmed it will run on Google’s Android system.

Tesco is not the first retailer to cash in on the mobile device revolution. This year Aldi announced it was relaunching its £80 LifeTab, which sold out 24 hours after it was released last year.