Texas Instruments announced plans for a chip on Monday that it said will give users more versatility in how they use their cellphones, helping it to compete better with rivals including Qualcomm Inc and Nvidia.

TI said that by combining OMAP 5 -- its next mobile application chip -- with its pico projection chip and an embedded camera it will allow phone or tablet users to do everything from writing emails and making calls to surfing the Web or playing a game by simply pointing their fingers at an image projected on a wall or table.

The new chip is aimed at helping TI compete in the market for chips used to power applications like mobile Web and video.

TI said OMAP 5, which will be available for tablet and phone makers to test in the second half of 2011, will also support four cameras in a single device -- two front-facing cameras and two back-facing -- to enable 3-D video capturing for 3-D video chats as well as 3-D video recording.

We're going to see an explosion in 3-D because it's the natural way to look at the world, said Remi El-Ouazzane, TI's general manager for OMAP.

The first commercial devices using the chip will arrive in the second half of 2012, according to TI.

TI, whose customers include Nokia and Research In Motion, said that even though OMAP 5 would offer three times the processing power of its existing OMAP 4 chip, it would use nearly 60 percent less power than the older chip.

TI shares were up 11 cents or 0.3 percent at $35.54 in afternoon trading on the New York Stock Exchange.

(Reporting by Sinead Carew; editing by Matthew Lewis)