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The world's largest cellphone maker Nokia unveiled its first phones using Microsoft software on Wednesday, hoping they will kick-start a rescue of its ailing smartphone business.

The Finnish group, struggling to keep up with nimbler rivals in a hotly contested industry, unveiled the lumia 710 and lumia 800 in London and priced them at 270 and 420 euros respectively excluding taxes and subsidies.

Crucially, the lumia 800 will include the full and free navigation service users crave.

The phones will be available in European and other markets around the world by the end of this year and in the United States in early 2012 and into mainland China in the first half of 2012.

Left in the dust by Apple and Google in the booming smartphone market, Nokia decided to ditch its aging Symbian platform in favour of Microsoft's software in a risky deal in February that spooked investors.

Nokia has not rushed with the new phones. Nimbler rivals HTC, Fujitsu and Samsung Electronics have beaten it with models using the latest Windows software, Mango.

Nokia and Microsoft have said they will focus on close co-operation with operators to support the platform.

"Operators really want to have another company on the scene: they don't want Google and Apple to rule the mobile universe," said Magnus Jern, chief executive of Barcelona-based mobile app development firm Golden Gekko, speaking ahead of the launch.

LUMIA HAS DARK BACKGROUND

Nokia's market value has halved since February as investors are unsure whether it can ever regain the market share it has lost.

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

With Microsoft software, Nokia hopes to gain the kind of attention Apple and Google have attracted from software developers that enrich their devices.

Research firm Strategy Analytics expects Microsoft to double its share of the Western European smartphone market during 2012 to 12.3 percent, helped by the Nokia partnership.

The 12.3 percent forecast for Microsoft's software refers to its use across several mobile phone makers and compares with the much higher market share Nokia's Symbian platform alone previously enjoyed -- it controlled 41 percent of the West European market as recently as the first half of 2010.

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