Nokia with First Windows Phone Handsets

Analysts Gartner say that Windows Phone 7's market share in the second quarter of this year was just 1.6 per cent. Windows Phone division chief Andy Lees said the Nokia devices were a huge development for Microsoft.

'Nokia brings state of the art industrial design and outstanding global distribution,' said Lees, 'Windows Phone brings it to life with an experience that puts people at the center.'

He said Google, maker of the popular Android operating system for mobile phones, was 'very nervous' at Microsoft's entry into the market, even though Windows Phone has a long way to go before it rivals more established products.

Elop also launched a new Asha series of phones running Nokia's existing Symbian operating system - designed to target what Nokia describes as 'the next billion'.

Elop said he was confident that the new handsets would help Nokia target 'a billion' urban consumers in emerging markets such as Mexico and India.

Elop said the distinction between 'smartphone' and other 'feature phones' was becoming blurred - and that the company's focus would be on providing connected devices to consumers in these markets.

The handsets were unveiled alongside new online services from Nokia - such as a 'cloud' storage service allowing users to store 25GB of data such as pictures and music on Nokia servers, rather than within the phone itself.

Last week, Microsoft CEO Steve Ballmer was dismissive of rival Android and said the only 'real' competition was Apple.

Windows Phone 7 is 'simpler' than Android - and the Google software's only advantage is being cheap, said Ballmer. He also said Apple's Siri voice software was 'not new'