CORRECTED - AT&T to sell LG's first smartphone for U.S. market

(Fixes to reflect that AT&T is the No. 1 U.S. mobile service, not No. 3)

NEW YORK, Nov 18 (Reuters) - AT&T Inc (T.N), the No. 1 U.S. mobile service, said on Tuesday it would sell LG Electronics Inc's (066570.KS) first smartphone aimed at the U.S. market in time for the holiday shopping season.

AT&T said it would charge $199.99 to customers who sign a new two-year contract for LG's Incite phone, which runs on the Windows Mobile operating system from Microsoft Corp (MSFT.O).

The pricing is in line with the iPhone from Apple Inc (AAPL.O), which AT&T sells exclusively in the United States.

Like iPhone, the Incite has touch-screen controls and supports services such as location-aware driving directions and mobile e-mail as well as mobile Internet. It also supports Wi-Fi, short-range wireless Web connections found in cafes.

While LG has already made a big splash with touch-screen phones such as the Venus and the Voyager, the company said this is its first U.S. smartphone as it is LG's first to use a computer-like operating system such as Windows.

Service providers, which are looking for ways to encourage customers to use cell phones for more than just talking, see smartphones as an increasingly important segment as consumers who buy them often spend more on data services. (Reporting by Sinead Carew, editing by Matthew Lewis)