Intel has developed a 3G modem roughly the same size as a UK penny or US one-cent coin, in the hope that it can be incorporated into smart appliances in the home.
The firm announced that the XMM 6255 has an area of 300 sq mm and is officially the world's smallest modem.
Intel also hopes that the standalone chip could be applied to wearable technology, as well as security devices such as smart smoke alarms.
The modem has been protected against overheating and is able to withstand difficult conditions. The device also comes with its own embedded power supply.
Sergis Mushell, a research director at analytics company Gartner, told the BBC that the product pointed to Intel entering the mobile connectivity market.
"It's not just about the size of it. What Intel is really doing is going after a significant stake in the Internet of Things market, where connectivity is most important.
"Getting connectivity right is essential for their entire product portfolio," he added, referring to Intel's traditional business of making processors.
He added that "anything with a screen will need to have connectivity" and processors will have to be combined with secure, low-power, connectivity technologies.
While the Internet of Things is still relatively unknown amongst the general public, it is expected to become more commonplace in the next few years. Wearable technology, in particular, is predicted to experience rapid growth, and the development of products such as the XMM 6255 is only going to speed up this process.