Intel’s Atom chip debuts in Orange smartphone

Mobile World Congress just became Intel’s(s intc) mobile coming out party. On Monday Orange(s fte) will debut the first smartphone powered by Intel’s Atom processor at the show, giving Intel a key foothold in the European market as well as a critical endorsement from a major carrier.

The Android(s goog) Gingerbread device, which will be built by Orange manufacturing partner Gigabyte, uses both Intel’s Medfield apps processor and its HSPA radio chipset. That indicates that Intel’s strategic decision to buy baseband chipmaker Infineon is paying off: it can now provide a complete silicon package for the mobile phone, which is key to getting in mid-tier and low-tier mass-market devices. And that mass market is clearly where the new phone, code named Santa Clara, is headed when it launches over the Orange networks in the U.K. and France this summer.

“It is not targeted at the 1 percent,” said Yves Maitre, Orange SVP of mobile multimedia and devices. But the phone also doesn’t skimp on performance, Maitre claimed. “We are providing a Ferrari experience to the mass market,” he said.

The Santa Clara has 4.03-in. screen, an 8 megapixel camera that can capture 1080p video, supports HD voice and even sports an NFC chip, which until now have been reserved for the more high-end phones. The Intel radio supports HSPA+ up 21 Mbps, and for those U.S. gadget lovers who like to import their phones from overseas, it runs over both European and North American GSM and HSPA bands (cellular and PCS).

Intel has won some smaller deals with Motorola(s mmi) and Lenovo, but being tapped by Orange is a major milestone. Handset vendors follow the lead of their operator customers, so if Orange wants to make a big push toward Atom-powered phones, they’re sure to fall in line. Maitre said Orange decided to run with Atom for two reasons: 1) Its ability to deliver a lot of performance for a lower price than comparable ARM architectures, and 2) Orange wanted to challenge ARM’s dominance, in hopes of creating competition in the processor market that could drive down chip prices.

Orange certainly has the clout to create that competing market. It’s a multi-national operator with networks all over Europe, the Middle East and Africa. Matire said the Santa Clara wasn’t a one-off deal. While he didn’t reveal any specific plans for other devices, he said Intel and Orange would continue to work closely together.

Intel still has a long road in front of it if it wants its X86-based Atom to become a true challenger to ARM. The ARM architecture resides in every Qualcomm(s qcom), Texas Instruments(s TXN), Nvidia(s NVDA), Apple (s aapl), Samsung, Broadcom(s brcm) and ST-Ericsson(s eric) mobile apps processor. Intel still has plenty of critics, who question whether Android apps will run properly on an X86 platform and point to the X86’s notorious power drain problems, but Intel claims that both those problems have been eliminated in its latest Atom hardware and software releases.

At CES, my colleague Kevin Tofel got some hands-on time with an Android 4.0 tablet powered by Atom and was impressed with performance of the apps he saw running on it – this is from a guy who has been very skeptical of Intel’s mobile overtures in the past. Maybe 2012 really will be the year that Intel builds its bridge to mobile computing.