Smartphones developed by the creators of the Firefox web browser are expected to be launched in Europe in 2013.
Chinese phone-equipment maker ZTE said it was working with a European wireless carrier to sell Mozilla's Firefox OS-powered phones.
ZTE chief executive Cheng Lixin also said the phones could be marketed in the US this year.
When finished, the phones will compete with Google's Android, but only at the lower end of the smartphone market.
Mr Cheng did not specify which European carrier would be selling the phones.
Jay Sullivan, vice president of products at Mozilla, said the company was also working with equipment makers Qualcomm, TCL Communication Technology Holdings on the devices.
"Interest and momentum continues to grow in Firefox OS," he told Bloomberg.
Regarding the US market, Mr Cheng said: "We closely monitor the ecosystem and how it evolves. If that is ready and if consumer studies support that data, then we may launch one in the US also this year."
Android controls three-quarters of the share in shipments in the smartphone market, but according to analysts, Firefox OS is already forecast to capture 1% of the share of global smartphone shipments in 2013.
Strategy Analytics recently wrote in a research note: "Overcoming Android will not be an easy task.
"To expand beyond niche status, Firefox OS will need to address at least three main challenges; they have low brand awareness among smartphone consumers worldwide, a limited retail presence in the influential United States market, and a relatively modest ecosystem of supporting apps and services."
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