Nokia has unveiled two new affordable touch-screen smartphone models this past Tuesday to guard its mass market position while it scraps to compete in high-end smartphones arena. Basic mobile handsets have caused most of Nokia’s sales, holding up much healthier than smartphones, where it has swiftly lost stake to rivals like Samsung and Apple. With a profit margin of over 20 percent, these phones are still the company’s chief cash source despite consumers increasingly switching over to smartphones.

Ovum analyst Nick Dillon has said that, “Although they don’t get as much attention as its smartphones, mobile phones play a key part in Nokia’s future. Mobile phones account for the majority of Nokia’s revenue today and they are also vital for building loyalty with potential smartphone users in the future.”

Asha 308 & 309

Nokia revealed that it expects the Nokia Asha 308 and the Nokia Asha 309 to retail for about $99, exclusive of taxes and subsidies, with deliveries to start in the fourth quarter of 2012. Experts have said offering phones around or under $100 is fundamental for the company if it wants to compete with cheaper smartphones using Google’s Android software. Nokia still sells almost 1 million basic phones daily but it has reported operating losses of 3 billion euros ($3.9 billion) in the last year and a half, all while closing sites and cutting tens of thousands of jobs.

Low Cost Smartphones Will Help Nokia

Analysts predict that the new phones will buy it time but that its new Windows smartphones must succeed to secure its improvement. “The new Asha devices are essential to defend Nokia from a raft of low-cost Android alternatives,” CCS Insight analyst Geoff Blaber said. “The continued strength of the mobile phone business is testament to Nokia’s scale and distribution advantages. Defending that business is critical if Nokia’s smartphone business is to weather the storm.”

The latest phones use Nokia’s low-end Series 40 software platform and therefore most analysts do not consider them as smartphones, even though Nokia itself retails them as smart devices in developing markets. Nokia has to use its low-end software for the new $100 phones as Windows Phone requirements for hardware are too high for such cheap phones.