Nokia to unveil first Windows phones

LONDON Tue Oct 25, 2011 7:02pm EDT

A corporate logo is displayed at the Nokia flagship store in Helsinki in this picture taken September 29, 2010. REUTERS/Bob Strong

A corporate logo is displayed at the Nokia flagship store in Helsinki in this picture taken September 29, 2010.

Credit: Reuters/Bob Strong

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LONDON (Reuters) - The world's largest cellphone maker Nokia will unveil its first phones using Microsoft software on Wednesday, hoping they will kick-start a rescue of its ailing smartphone business.

Nokia is widely expected to launch two to three new models using the software, including the Searay which was first shown in a leaked video months ago and looks very similar to its current N9 handset.

The Finnish company, left in the dust by Apple and Google in the booming smartphone market, decided to ditch its aging Symbian platform in favor of Microsoft's software in a risky deal in February that spooked investors.

Nokia has not rushed with the new phones. Nimbler rivals HTC, Fujitsu and Samsung Electronics have beaten it with models using the latest Windows software, Mango.

Nokia and Microsoft have said they would focus on close co-operation with operators to support the platform.

"Operators really want to have another company on the scene: they don't want Google and Apple to rule the mobile universe," said Magnus Jern, chief executive of Barcelona-based mobile app development firm Golden Gekko.

Analyst Carolina Milanesi from research firm Gartner said Nokia should price its first models below those of Samsung and HTC, and then market them heavily.

"Price is going to be the key -- you need to give a bit of the carrot to consumers and developers," she said.

Nokia's market value has halved since February as investors are unsure whether it can ever regain the market share it has lost.

Its third-quarter results beat low expectations, sparking hopes that the company can survive a painful revamp, but smartphone sales still dropped 38 percent from a year ago.

Nokia said last week that its first Windows phone would reach selected markets this year, but declined to say whether more than one model would be launched this week.

With Microsoft software, Nokia hopes to gain the kind of attention Apple and Google have attracted from software developers that enrich their devices.

There are some initial positive signs.

"We are seeing Windows being acknowledged as platform No 3," said Golden Gekko's Jern, adding that Microsoft and Nokia, are subsidizing app development to kick-start the new platform.

"We are working on 10 applications of which five are paid by Nokia," Jern said.

Research firm Strategy Analytics expects Microsoft to double its share of the Western European smartphone market during 2012 to 12.3 percent, helped by the Nokia partnership.

The 12.3 percent forecast for Microsoft's software refers to its use across several mobile phone makers and compares with the much higher market share Nokia's Symbian platform alone previously enjoyed -- it controlled 41 percent of the West European market as recently as the first half of 2010.

The annual Nokia World media and industry event in London on Wednesday includes speakers from the world's largest carriers: China Mobile, Vodafone, Orange and MTN.

(Editing by Erica Billingham)

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