Nokia aims at its rivals with new Windows smartphones

Ailing Finnish telecoms giant launches first phones since signing deal with Microsoft

Nokia has launched its latest assault on the smartphone market with the first phones to emerge from its partnership with Microsoft, with analysts questioning if it is enough to reverse the group's current decline.

The ailing Finnish group has fallen from grace since its domination of the mobile phone market in the late 1990s and the start of the new century, but believes the two new handsets released yesterday will herald a "new dawn" for the company.

Its chief executive Stephen Elop called them the "first true Windows Phones". Analysts at CCS Insight said the phones were a "remarkable achievement" after only eight months of development but added: "Nokia still has a mountain to climb to compete with Android and Apple."

In February, Mr Elop said the group was to shift focus from its smartphone operating system Symbian in favour of Windows, following a tie-up with Microsoft, another company desperate to crack the smartphone market.

Yesterday, at the Nokia World event in London, the first phones developed under the new partnership were unveiled. The Nokia Lumia 800 device is aimed at the high-end market, and will compete with mobiles including the iPhone 4S, the HTC Sensation and the Samsung Galaxy SII. The "no-nonsense" Lumia 710 will be available at a lower price.

Mr Elop said: "Earlier this year we recognised the need to shift our mobile strategy. We want people to feel and expect something special when they hear the word Nokia, but this simply wouldn't happen without change."

He added: "We're driving innovation throughout our entire portfolio, from new smartphone experiences to ever smarter mobile phones."

The Lumia 800 will cost about £366 without subsidies, while the 710 will be about £235. The phones will run the latest Microsoft operating system, Windows Phone 7.5 Mango. As well as faster processing speeds, 16GB of storage and a Carl Zeiss camera lens, Nokia has followed HTC by trying to promote itself as a music player.

Francisco Jeronimo, the European mobile device research manager at IDC, said the question that loomed over yesterday's event was: "Will these devices save Nokia?" He said: "It will take a lot more than just a couple of phones to bring Nokia back, but what we are seeing today is an excellent first step."

However, he said Nokia would struggle to sell huge numbers of the phones because of the low take-up and awareness of Windows phones. "Although this will change over time".

There is support for the phone among the operators, who are keen to promote a competitor to the iPhone and the stable of Android phones. IDC forecast that the share of phones running Microsoft's operating system would rise from 2 per cent earlier in the year to 20 per cent by 2015, ahead of Apple.

Mr Jeronimo backed Nokia's chief executive: "In 13 months, Elop stepped in as CEO of the biggest phone maker in the world, defined a new strategy and a new paradigm for Nokia, executed it and over exceeded expectations by delivering not only one, but two new Windows devices."