A UK startup will this week start selling a cheap plastic tag it believes could banish forever the daily blight of mobile phone loss and theft.

The device is called the ‘nio', from Edinburgh-based TenBu Technologies, and hides several years of hard development graft and thought behind a principle so simple that at first it seems astonishing that nobody has thought of it before.

Coming with its own USB-rechargeable battery and microprocessor inside a simple plastic shell, the nio is designed to attach to a keyring and communicate silently and continuously via Bluetooth with a user's handset, which runs a specially-written mini-application. As long as the nio and the protected handset remain within a specified distance, selected points up to 25 metres, nothing happens. However, if that proximity is broken, an alarm sounds on both the handset and the nio itself, alerting the user.

Cleverly, because the system is based on the proximity of a handset to the tag, nio can easily be used to protect not just the phone itself, but whatever the tag is attached to, be that other valuable objects such as a laptop, car keys, or even, according to its inventor Ben Hounsell of TenBu, a human subject such as a child. It is possible to associate a single handset to several tags, where a variety of objects need to be protected at the same time.

The software also allows the user to specify certain times on a calendar when the system should be active or inactive, and even set up the ultimate ant-theft setting for a mobile device such as a laptop, a motion sensor.

"Because the phone is the one thing we all carry around with us, it's also the one thing we don't want to lose," says Hounsell during a personal demonstration. "The nio is like a burglar alarm for your mobile."

Against the cost of each nio tag, businesses should offset the problems of mislaid or stolen hardware. "You have the downtime of the individual who can't make a phone call and the cost of the IT guys having to reconfigure the phone. We call it a ‘gadget guardian'. It's a first line of defence."

Despite its apparent simplicity, Hounsell's description of the product's long and sometimes tiring gestation suggests that the underlying technology has been anything but simple to perfect. Getting Bluetooth and a mobile phone to communicate is easy. What has been trickier, he says, was getting the device to accurately assess distances so as to allow the user to set up security thresholds for different type of device and situation. Failing to crack this problem would have resulted in a tag that struggled with the sort of false positives that might render it useless.

Key to the nio's medium-term success will be the range of handsets it supports, which currently extends to all Blackberrys, Nokia's N and E-series, a wide range of Sony-Ericsson models, plus anything running Windows Mobile 5.0/6.1.The only other requirement is Bluetooth.

The Apple iPhone is not yet supported, Hounsell says, because its hardware design makes it a poor multi-tasker. It is also being aimed at the business market, where worries about smartphone loss, theft and data security are paramount, a sector that has not yet seen enough iPhone uptake to justify consuming the development time of TenBu's small team.

The nio is on sale from this week for £39.99 (approx $65) from the company's website, with sales due to begin on Amazon and Handango in the coming weeks. A video demo of the product can be seen on YouTube.