With a new Atom chip, Intel’s smartphone BFF is ZTE

After years of trying to crack the mobile market there are still relatively few smartphones with the “Intel Inside” branding. Last year was a bit of a breakthrough, however, as Intel(s intc) silicon powered the Motorola Razr i(s goog) handset. Yet few other handset makers have followed suit, leaving Intel with few places to put a mobile foothold. The situation could be changing.

Motorola Razr i with Intel InsideOn Tuesday, Chinese handset maker ZTE announced a strategic collaboration with Intel on the chipmaker’s latest Atom processor. The Intel Atom Z2580, announced at last month’s Mobile World Congress event, is the focus of the strategy, adding a few small but important improvements over the current Atom chip used in ZTE’s Grand X IN handset last year. More important is the fact that ZTE is a fast growing handset maker, currently the No. 4 seller of mobile phones in the world.

That data point alone is good news for Intel because it’s not likely the company will get its chips inside devices made by Samsung, Apple(s aapl), Nokia(s nok) — although that would be an interesting WinTel mobile play — or many of the other household name mobile device makers. Even better for Intel is ZTE’s base of China: The handset maker’s home country is expected to see big growth in smartphone sales thanks to its large population, improving mobile broadband networks and current lack of smartphone penetration compared to the U.S. and Europe.

As a result, depending on how many smartphones come from this agreement, Intel has a key hardware partner in an important mobile market. This new Atom chip is just a slight refresh of the prior one, but does show promise: a second processing core is housed in the Z2580 and the graphics capabilities are increased; an area where ARM solutions still have an advantage. Intel has switched the GPU to a PowerVR SGX 544MP2 at 533 MHz from the older PowerVR SGX 540 running at 400 MHz, notes AnandTech.

Note that ZTE isn’t going with an all-Intel strategy for its smartphones. Last month, Nvidia(s nvda) announced that its first big partner that will use the Tegra 4 chip will be ZTE. Even so, Intel getting any kind of traction in the mobile market is good for the company, which has missed out on most of the mobile revolution to date.