BEIJING: Google, the online search giant, is teaming up with China Mobile, the telecoms company, to launch a new smartphone in China, as it seeks to tap into the world's biggest mobile market.

It is estimated that there are currently around 700 million mobile subscribers in the Asian nation, with smartphones holding a market share of around 10%.

However, 3G services have only recently been made live in the country, and the opportunity to enjoy high-speed access to music and games via wireless handsets is expected to quickly boost demand.

China Mobile's OPhone will be manufactured by Lenovo Mobile, and use the Android operating system developed by its American partner.

The deal constitutes an alliance between two of the world's most valuable brands, according to the most recent BrandZ rankings from Millward Brown.

It is thought that the two companies' new device will be available with a subsidy of up to 2,000 yuan ($292; €206; £175) – 50% of the total cost – for China Mobile's existing customers.

Alongside the OPhone, China Mobile is said to be planning the introduction of another smartphone, Magic, to the market, which will be produced by HTC, and also use Google's software platform.

China Unicom, the second-biggest wireless network in China, has also been in negotiations with Apple about selling the iPhone there.

T-Mobile reported that sales of its G1 handsets, which are powered by Google Android, surpassed one million units in the first six months it was available to purchase in the US, compared with 1.75 million iPhones that were sold in the half-year after its launch in 2007.

Data sourced from Financial Times; additional content by WARC staff