Nokia with First Windows Phone Handsets

Nokia unveiled a new crop of smartphones that could put the company back in the smartphone race with rivals iPhone and Android. It could also mark a turnaround for Microsoft's unpopular Windows Phone 7 software.

Nokia CEO Stephen Elop unveiled the company's new partnership with Windows Phone 7 today in the form of the Nokia Lumia 800 - a hi-tech, mid-priced handset running the latest version of Microsoft's operating system.

The phone costs £364. The cheaper, lower specced Lumia 710 model will cost just £234. Both will go on sale across Europe in November.

The pricing in particular could be crucial in putting Microsoft's Windows Phone 7 back in competition with its smartphone rivals. Microsoft CEO Steve Ballmer said that the Windows giant would cut prices to drive sales.

The partnership is predicted to capture 12.3 per cent of the European market for Microsoft over the coming year, said analysts Strategic Analytics this week.