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In this Feb. 11, 2008, file photo, general manager of the Nokia factory in Romania, John Guerry, casts a shadow on a banner at the new Nokia factory in Jucu, central Romania, during the official opening of the first production line.

Vadim Ghirda/AP/Vadim Ghirda/AP

The world's largest cellphone maker Nokia Corp. unveiled two sleek Microsoft Corp. Windows phones on Wednesday, a first step in the ailing cellphone maker's fightback against Apple Inc. and Google Inc. .

The flagship Lumia 800 and more basic Lumia 710 will go on sale in key European markets by the Christmas holiday season.

Examining the first fruits of chief executive Stephen Elop's big bet on the Microsoft software that spooked investors earlier this year, some analysts were impressed, but others said the pairing remains well short of finding an iPhone killer.

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"It's a new dawn for Nokia," Mr. Elop told about 3,000 customers, partners, developers, analysts and journalists gathered in London for the much-anticipated launch at the company's annual conference.

He said the new phones' minimalist design and superior navigation features would make them stand out among rival Windows phones, some of which have been faster to market with Microsoft's new mobile platform.

The Lumia 800, with vivid colours and a curved, black display, features live icons on the home screen that automatically update news, weather or Facebook feeds. It also boasts free navigation and Microsoft's new Internet Explorer 9 browser.

It will sell for about €420 euros ($584 U.S.) excluding taxes and subsidies, putting it in the same bracket as Apple's new iPhone and Samsung's top-end Galaxy phones.

The Lumia 710 will sell for about €270.

"These devices are a good start, but the reality is that they are pretty much plain vanilla Windows Phone products," said Ben Wood, director of research at U.K.-based telecoms analysis firm CCS Insight.

"The real fruits of Nokia's and Microsoft's labours will come next year ... but it remains a Herculean task to recapture this lucrative market from Apple and Android."

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Others said that Microsoft's marketing muscle and Nokia's still-strong relationships with mobile phone operators should help push the new phones into the hands of consumers through prominence in stores and attractive package deals.

"The Lumia phones do have some strong selling points in their own right ... and they offer a look and feel that's radically different from anything seen previously on a Nokia device," said John Delaney, research director at technology research firm IDC. "These devices are strong contenders."

Nokia shares were sharply up before Wednesday morning's announcement but gave up most of their gains to trade up 1.5 per cent by 10:29 GMT, still outperforming a flat wider market.

The phones will go on sale in France, Germany, Italy, the Netherlands, Spain and Britain in November, with 31 operators and retailers providing marketing support, and in Hong Kong, India, Russia, Singapore and Taiwan before the end of the year.

Nokia said it would address the crucial U.S. market, where it has always struggled, early next year, and mainland China in the first half of 2012.

Nokia also unveiled four new basic phones for emerging markets, where it still holds a leading position.

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Nokia's market value has halved since February as investors are unsure whether it can ever regain its once-commanding market share.

Its third-quarter results beat low expectations, sparking hopes that the company can survive a painful revamp, but smartphone sales still dropped 38 per cent from a year ago.

The annual Nokia World media and industry event in London where the launch took place on Wednesday includes speakers from the world's largest carriers: China Mobile, Vodafone, Orange and MTN.

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