Nokia strengthens basic range with 15 euro phone

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By Paul Sandle | February 25, 2013 9:42 PM EST

Nokia launched a 15-euro phone to shore up its position in the basic handset market, where it has lost share while it focused on developing expensive smartphones.

The Nokia 105, introduced at the Mobile World Congress in Barcelona to go on sale later this quarter, is the successor to the 1280, which sold more than 100 million units.

It also unveiled a 65-euro phone with some Internet access and lower-priced versions of its Lumia smartphones, filling in the gaps in its product line-up between its high-end Lumia devices that run Microsoft software and its mid-tier Asha feature phones.

The Finnish company hopes the new phones will increase sales in emerging market and shows it is refocusing on the cheaper end of the market, where it makes the bulk of its handset revenue.

"That is a key part of our approach to competition, particularly in a country like China," said Chief Executive Stephen Elop at the Mobile World Congress in Barcelona.

"There's a very large number of inexpensive and largely undifferentiated devices. We believe we have to offer differentiation at each price points."

The company is struggling to catch up with Apple and Samsung in smartphones, while also losing share in the low-end market where sales have suffered as it focused on smartphones.

IDC research director Francisco Jeronimo said the new products, which also included the Lumia 720 smartphone with the same camera lens as the 920, gave Nokia a comprehensive range, leaving little excuse for poor sales.

"If Nokia does not improve its market performance with these devices, then will never do without a radical change on its portfolio strategy," he said.

The Nokia 105 would probably be the cheapest phone available in the world from a major brand, he said.

"The pressure is now on the Chinese vendors. Why will any consumer in the world buy a cheap Chinese phone when they can have the same price with better quality from a well known brand?"

Nokia's Lumia phones have won plaudits from industry analysts for features such as photography and mapping, but sales have been dwarfed by devices from the likes of Samsung running Google's Android software and Apple's iPhone.

Nokia's market share in smartphones have fallen to around 5 percent, while Apple and Samsung together control over half the market.

(Additional reporting by Ritsuko Ando; editing by Anna Willard)

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