The Vodafone xone hub in London will be responsible for developing mobile technologies, with a focus on building and testing prototype devices and developing apps and services tailored for the group's biggest markets in Europe, Africa and India.
"Establishing a new hub in London will bring our product development team closer to the customers it serves," said Stefano Parisse, Vodafone's consumer services director. "It will allow us to draw on a vast pool of technology talent in the UK and Europe and simplify our development process, enabling us to get the very latest technology into the hands of our customers as quickly as possible."
The group's venture capital arm, Vodafone Ventures, will remain in California, helping to fund early-stage technology startups, while Vodafone Global Enterprise, which supplies mobile services to American companies, will remain in Silicon Valley.
But the closure of Vodafone's research base in Redwood, California, is something of a U-turn for the company. The office was opened in September 2011, with a brief to incubate startups and fast track their ideas by offering technical expertise, business advice and access to the Vodafone lab to ensure products were compatible with its networks.
Fay Arjomandi, a technology entrepreneur who joined Vodafone in January 2011 and headed the Redwood operation, is to leave the company. Pratapa Bernard has been appointed as the new head of Vodafone xone, reporting to Parisse.
Five staff were employed in Redwood, and the London team is to expand from 12 to 20 people.
Vodafone has already opened xone bases in Dusseldorf, Milan and Cairo, and on Tuesday the company launched a NZ$50m (£25.2m) research operation in Christchurch, New Zealand, a boost to local business development which was set back after earthquakes damaged the city. The office will nurture between 10 and 20 startups at any one time.
Apps already being developed include findxone, a tag that can be attached to handbags and luggage to track their whereabouts, which is on trial in the UK. Another, drivexone, connects cars to their owners' smartphones, enabling drivers to find their vehicle in a multistorey carpark; it also lets them calculate mileage driven and map places visited.
A spokesman said the decision to exit California was not linked to last year's sale of Vodafone's 45% in America's largest mobile phone network, Verizon Wireless, which was the British firm's only stake in an operating company on the American continent.
• This article was amended on 3 June 2014. It originally stated that Christchurch was the capital of New Zealand. The capital is Wellington. It also incorrectly stated that Microsoft is headquartered in Redwood, California. These errors have been corrected.
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