ophoneChina Mobile’s launch of its OPhone series of smart phones got a lot of attention as the Android-based models are viewed as a key challenger to Apple’s iPhone, which hasn’t yet launched in China. And one of the quiet beneficiaries of this launch is Marvell Technology, a communications chip maker.

Tthe Santa Clara, Calif.-based firm claims to have already managed to get its radio chips into most of China Mobile’s dozen OPhone models which launched on Aug. 31. That’s a big deal — China Mobile, the world’s largest wireless phone network operator, has about 700 million subscribers.

If the low-priced OPhone takes off, it could make the Android phone operating system a serious challenger to the iPhone in the smart phone business. While the iPhone has an expensive design, Google’s Android software is designed to give computer-like functions without adding a lot of costs. China Mobile designed its own user interface — which closely resembles the iPhone’s touchscreen interface — to sit on top of the Android software. It needed powerful but power-efficient hardware in order to make everything run without hiccups. The Marvell TD-SCDMA radio chip was critical because it could allow the phone to transmit or download a lot of data — something that is essential for apps-based smartphones that access a lot of web data.

Weili Dai, co-founder of Marvell and head of its consumer and computing business unit, said in an interview that Marvell developed its TD-SCDMA cell phone radio chips for two years, working closely with China Mobile in the process. It is the only company that can put the TD-SCDMA radio into a single chip. That will help bring the cost of smartphones to below $100 in the coming year.

“We were very committed as the only silicon solutions provider trying to do this,” said Dai, who was born in Shanghai and who now has a big development center with 700 employees in the city. “We believed in the long-term vision of China Mobile.”

Dai, who had been traveling in China for the past couple of weeks, said she was pleased with the Ophone launch. She said that her company relied on the Xscale business that it bought from Intel back in 2005 as the foundation for its new chips, which focused on the combination of high-performance and low-power in order to give the smart phones computer-like performance and long battery life. Intel’s Xscale processors represented a bold effort to diversify away from PC microprocessors, but Intel was hurting in 2005 from competition with its main competitor, Advanced Micro Devices. It didn’t have the stomach to take on the likes of Qualcomm at the same time.  But Marvell did.

Since the OPhone is a home-grown solution, it may enjoy a hometown advantage over other phones in the market. Marvell isn’t making predictions about how many of its PXA920 chips it will sell in the new phones, as it is awaiting reports from China Mobile. But Marvell’s stock is trading near its 52-week high. Financially, Marvell got pummeled in the financial downturn of the past year and lost $111 million in its fiscal first quarter ended May 2. But sales bounced back in the second fiscal quarter ended Aug. 1 to $640 million, up 23 percent sequentially from the prior quarter. Profits recovered to $58.4 million.

So the sales from the China Mobile phones come at an important time in terms of helping Marvell with its turnaround. Dai also believes that other devices beyond smart phones will take off in the near future, from electronic book readers to “smartbooks” and other kinds of radio-connected web devices.

Marvell has previously sold networking chips into the Chinese market, but it is only just getting started with its cell phone radio chip sales in that market. Smartphones account for 16 percent of cell phone sales now, according to market researcher IDC. That could go up dramatically in the years ahead, with smartphone sales hitting 200 million units in 2010. There will be lots of competition in the chip market, with rivals including STMicroelectronics, Qualcomm and Nvidia. But Dai says, “The beauty is that the pie is huge.” And Marvell will get its fair slice.