Inspired by the success of its Hudl tablet that sold slightly over half a million units in 2013, Tesco is planning to launch its very first Android smartphone by the end of 2014.

The announcement came on May 6 over a BBC Radio 5 program. 

Tesco CEO Philip Clarke confirms to BBC that the budget smartphone would be pre-installed with Tesco services, which include apps for shopping and for its Blinkbox film, Clubcar TV, clothing, homeware, banking and online grocery and music streaming service. 

Although the CEO did not disclose specifications of the smartphone, market analysts speculate the features of the smartphone will be similar to premium devices such as the Samsung Galaxy S5 unit but with a much competitive price.

Along with the new smartphone, a second version of the successful Hudl tablet is also expected to roll out in September this year to take advantage of the Christmas shopping season that may boost tablet sales.

In February 2013, the company sought the trademark of the Hudl brand, which covers tablet computers and accessories such as earphones, screen protectors, car battery chargers, cases and stands, as well as electronic devices such as energy control devices, wireless speakers, electronic heart-rate monitors, HDMI cables and TV set-top boxes.

The announcement of the incoming smartphone was, however, met with doubts from other analysts saying the new venture is a distraction to Tesco's primary business.

Gathered reports say Tesco continues its struggle to keep the business back on its feet which puts Clarke under intense media scrutiny. Clarke reveals that the company is testing a digital version of its Clubcard and concentrating on a social network that would hopefully help the business. He also confirms of new efforts to modify the focus of the company away from the supermarket stores and instead on to the smaller shops focusing on the specific needs of the local community. He even coins a term for it: "New Tesco." He reveals the company will open 12 new stores but not as big as Tesco Extras.

"It is the end of new big stores," he says to BBC.

In April, the company's trading profits went down six percent to £3.3bn, while like-for-like sales also went down in the UK by 1.3 percent. With these results, Clarke promised to win back the company's shoppers with possible millions of pounds of price reductions.

Also with the new Hudl smartphone in the process, Tesco is hoping to start picking up from where the company left off in its tablet success.