Nokia unveils thin Barracuda

By Tarmo Virki

HELSINKI (Reuters) - Top world cell phone maker Nokia unveiled a thin "Barracuda" phone and six other handsets priced under 100 euros ($135.65) on Thursday, including its cheapest 1200 model expected to sell for 35 euros.

The Finnish firm, which sells more than a third of all cell phones across the world, repeated it expects the global market to grow this year by up to 10 percent from a year ago level of 978 million handsets.

Nokia(NOK1V.HE) has a strong position in emerging markets, but in developed markets Motorola (MOT.N) and Samsung (005930.KS) have attacked it with popular thin phones.

The Barracuda, or Nokia 2630, is slightly below 10 millimeters (0.4 inch) thick, comparable with most rival thin phones. The handset will hit the shelves next quarter, with an estimated retail price of 85 euros, excluding operator subsidies and taxes.

"At these prices, the largest volumes are sold -- on both developed and emerging markets. Of course we expect to see very high volumes from Barracuda," Kai Oistamo, head of Nokia's cell phones unit, told Reuters.

Oistamo displayed the Barracuda at an investor event last November, in a gesture that calmed many investors' fears concerning Nokia's answer to thin phones.

"It was a sign of change in the overall thinking ... It's the whole new approach to marketing and communications as a whole, clearly less conservative and somewhat more aggressive and forward-looking than earlier," Oistamo said.

Analysts welcomed the long-awaited phone, which has a camera on the back and also incorporates Bluetooth technology, which is widely used in mid- and high-end phones and enables the phone to connect to a headset or laptop without wires.

"It's thin, it's light and it has quite appealing features," said Handelsbanken analyst Karri Rinta.

LOOKING AHEAD

"As we look to the future, we carry with us the momentum of a good performance in 2006 and in this year's first quarter," Chief Executive Olli-Pekka Kallasvuo said at the annual shareholders meeting.

In the first quarter Nokia increased its global market lead to its widest since 2003 over closest rival Motorola (MOT.N), which reported a loss for the January-March quarter. The Finnish company's global market share was 36 percent.

"By having a clear leading position in the market, we are able to leverage our scale benefits," Kallasvuo said.

One of the keys to Nokia's success in the lower end of the market has been its wider product offering than those of rivals, who have competed for the space with one cheap phone here or there.

Nokia also is benefiting from its early entry into fast-growing emerging markets, such as India, where it often has more than a 50 percent market share.