Nokia takes on rivals with N97 touch-screen phone

By Tarmo Virki

BARCELONA (Reuters) - Nokia launched a flagship phone to update its aging high-end offering, but analysts said the device would not be enough on its own to help the world's top mobile phone maker recover lost market share.

Nokia continues to lead the global market for smartphones -- handsets with computer-like features such as email -- but it has lost significant share to Apple's iPhone and RIM's Blackberry, worrying investors and analysts as this is expected to weigh on the Finnish group's profit margins.

All vendors are after a bigger slice of the smartphone market, which is set to continue growing next year despite gloom in the wider handset market.

"Without a doubt Nokia needed a high-end touch-screen phone," said Martti Larjo, analyst at Nordea.

The new Nokia N97 handset comes with a large touch screen, will retail for 550 euros ($693) before taxes and subsidies and is due to reach the market by end-June next year.

It has promised to introduce touch-screen models across its portfolio. Nokia was the last major handset maker to introduce touch-screen phones after the runaway success of Apple's iPhone, and last month started to sell its first such model.

The new N97 is a direct rival to Sony Ericsson's X1 and HTC's Touch Pro -- both of which use Microsoft's Windows software and are in shops already -- and analysts said by the time it goes on sale more direct rivals will likely have appeared.

"It might give Nokia a little edge, but it's six months until this reaches the market," said Gartner analyst Carolina Milanesi.  Continued...