Who Is Nokia Eyeing With Its Super-Cheap Phone?

Nokia Corp. (NYSE:NOK) unveiled $68 Nokia 207 and 208 models that the company says are the “most affordable 3G devices yet.”

The new devices are expected to start shipping this quarter. The phones come with Nokia’s Xpress browser that will allow users to surf the Web and access popular mobile apps using a 3G network.

Nokia has been struggling to catch up to competition from industry titans Apple Inc. (NASDAQ:AAPL) and Samsung Electronics (SSNLF.PK) in the $500-and-up high-end smartphone category. But the Finland-based company has been more successful than Apple or Samsung in the low-end market, which accounts for the majority of its business.

But Nokia’s dominance in the low-end market has been challenged recently by small Asian smartphone makers pushing cheap phones that run on Google Inc.’s (NASDAQ:GOOG) popular Android operating system.

Nokia CEO Stephen Elop has blamed the company’s recent struggles on intense competition in high- and low-end smartphone markets, saying that the company is planning some aggressive moves to cope, including rolling out the super-cheap 207 and 208 phones.

Nokia has been slow to break into the smartphone market. The company sold 336 million phones last year, but only 10 percent of them were smartphones. Nokia reported in April that it sold 11 million fewer phones than analysts expected. Its basic phone sales plummeted 21 percent, to 55.8 million devices sold.

Earlier this week, Nokia announced it was buying out Siemens AG’s (NYSE:SI) share in the Nokia Siemens Networks joint venture, which sells telecommunications equipment to mobile phone carriers. Nokia seems to be branching out to focus more on mobile infrastructure as it has been unable to keep up with competition in the smartphone market.

The company has some catching up to do in regards to handset sales, especially in the low-end market where it has seen most of its previous success. If the 207 and 208 prove to be popular low-end smartphones, the models could help Nokia get a leg up on the competition on low-end Android phones flooding the market.

Follow Jacqueline on Twitter @Jacqui_WSCS