Nokia, the world's largest cellphone maker, unveiled the N97 on Tuesday, a new flagship model with a large touch screen which it hopes will bolster its smartphone offering.

The Finnish handset giant hopes the new model will inject new life into its line-up of N-series multimedia phones, a former trademark of cutting edge technology that has seen few innovations lately.

'This is really the start of the new N-series ... really kicking off the next wave,' Jonas Geust, vice president of Nokia's Devices unit, told Reuters in an interview, adding touch screens and full-qwerty keyboards will be key features in the new wave of products.

'What would there be these days without touch ... Touch for this category of devices is going to be important. Qwerty is also going to be important,' he said.

The battle for a bigger share of the smartphone business has heated up since Apple introduced its iPhone last year, and all vendors are seeking a bigger slice of the market, which is set to continue growing despite gloom in the wider markets.

Nokia was the last major handset maker to introduce touch screen phones following the runaway success of iPhone. Last month Nokia started to sell its first such model and it has promised to introduce touch screen models across its portfolio.

Nokia continues to dominate the global market for smartphones -- handsets with computer-like features like e-mail -- but it sold less of them in the third quarter than a year ago, losing market share to Apple and Blackberry-maker RIM.

Nokia's ailing position in the high end of the cellphone market worries investors and analysts as this is expected to weigh on the Finnish group's profit margins.

The new N97 is a direct rival to Sony Ericsson's X1 and HTC's Touch Pro -- which both use Microsoft's Windows software -- 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.

Nokia said the new phone is expected to retail for prices similar to the N95 and N96 when these were first introduced. The N97 is scheduled to reach markets latest in June next year.

Nokia introduced its last major N-series hit, the N95, in 2006 and started its sales early last year. To date it has sold more than 10 million N95s, creating revenues of several billion euros.

'Nokia faced difficult choices with the N97. It tried to cram in lots of different technologies such as a touch screen, full qwerty keyboard and plenty of memory, but it had to make trade-offs in its size and features,' said Ben Wood, research director at CCS Insight.
   
'It has ended up with a relatively thick device that lacks some of the benchmark features expected in flagship products in mid-2009,' he said.-Reuters