By Tarmo Virki

HELSINKI (Reuters) - Nokia , the world's top handset maker, unveiled four new phone models on Wednesday, targeting consumers in emerging markets who are about to replace their first phones.


The company, which makes four out of every 10 phones sold globally, has been fiercely defending its dominant position in emerging markets and in making cheap models, as market growth in Europe and North America has slowed.

The cell phone maker's new phones are priced between 50 euros and 90 euros, targeting cheapest offerings from its main rivals, all of whom have so far shied from competing with Nokia's scale-benefits in making even cheaper phones.

Nokia expects replacement sales to consumers who already own a phone to grow to more than 60 percent of sales volumes in emerging markets this year from around 50 percent last year.

"We see a major trend happening there," said Alex Lambeek, head of emerging markets business at Nokia's entry unit.

When asked whether the firm was afraid of rivals getting into Nokia's stronghold -- it's entry unit gross margin has been at over 25 percent level -- Lambeek said:

"We have a healthy level of paranoia, but at the same time we have our own strategy and the key is to execute that -- adding new dimensions like services and driving this replacement market and I believe that will keep us ahead."

Nokia expects spreading of FM radio receivers and recorders, cameras, and music players to boost replacement demand on emerging markets.

"The FM radio story is the first thing. Having FM on wider range of entry products and now FM recording. I would argue FM recording is the multimedia innovation for emerging markets," Lambeek said.

Two of the new phones unveiled at a media event in Johannesburg, the Nokia 5000 and Nokia 2680, have radio recording function.

Nokia unveiled a low-end multimedia phone Nokia 5000, which it plans to start selling this quarter for around 90 euros ($141), excluding taxes and subsidies.

This quarter it would also start to sell its cheapest cameraphone, Nokia 1680 Classic, which would retail for 50 euros, when excluding taxes and subsidies.

The Finnish handset maker said Nokia 2680, with a sliding design and priced at 75 euros, and Nokia 7070 Prism, priced at 50 euros, would both go on sale in the third quarter.

"To keep the very strong leadership position in the emerging markets we have, we need to give consumers more choice -- be it on design, be it on features, and in the future on services as well," Lambeek said.

"In many emerging markets, also in Africa, the first email will be sent and seen through the mobile device."

In Africa and the Middle East, its market share was 67 percent in the fourth quarter, according to Strategy Analytics.

Late on Tuesday Nokia unveiled three mobile devices -- two phones for CDMA networks and an Internet tablet -- at a trade show in the United States.

Nokia's shares were up 1.3 percent at 21.77 euros at 1130 GMT, following a 7.3 percent jump the day before on expectations of Nokia's strong performance in emerging markets.

(Reporting by Tarmo Virki, editing by Will Waterman)
© Copyright 2007 Reuters.

Photo:
Nokia 5000