A spokesman for the firm said the Tesco
smartphone would run on Google's Android software and would be
pre-installed with Tesco services.
Tesco has sold over 500,000 Hudl tablets and plans to launch a
second version later this year.
Last month the firm's chief executive Philip Clarke vowed to win
back shoppers with millions of pounds of price cuts after
posting a second year of falling profits.
(Reporting by James Davey; editing by Kate Holton)
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