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Microsoft and Nokia pin mobile hopes on new Lumia

Software giant set to unveil the latest fruits of its smartphone technology tie-up with Nokia later.

Nokia and Microsoft will take the wraps off the struggling European company's most powerful smartphone later today, in what may be their last major shot at winning back a market lost to Apple, Samsung and Google.

The world's largest software maker and the Finnish company that once dominated the cellphone market will showcase the device in New York and demo it for industry insiders about the same time in Helsinki.

Microsoft and Nokia hope the new Lumia will become a potent weapon in an escalating global mobile industry war.

There have to be more devices, and their features have to stand out more.

Google's Motorola Mobility intends to show off its latest smartphone on Wednesday, Amazon.com will unwrap new Kindle Fire tablets the day after, and Apple is expected to unveil the latest version of its seminal iPhone on September 12.

Samsung Electronics says it will sell its own Windows phone as early as next month.

The Lumia 920 and smaller Lumia 820 will run on the latest Windows Phone operating software, which Microsoft hopes will rival Apple's iOS and Google's Android to become a third mobile platform.

If the new phones do not appeal to consumers, it could spell the end for loss-making Nokia and deal a serious blow to Microsoft's attempts to regain its footing in the market.

Leaked pictures of the two models show a similar look to Nokia's previous Windows phones, but analysts say these alone will not be enough to turn the corner.

"There have to be more devices, and their features have to stand out more. There has to be a 'wow' device," said Hannu Rauhala, analyst at Pohjola Bank, who cut his recommendation on Nokia's shares to "reduce" on Tuesday.

The stakes are high for both Nokia and Microsoft.

The Finnish handset maker has logged more than 3 billion euros ($3.8 billion) in operating losses in the past 18 months, forcing it to cut 10,000 jobs and pursue asset sales.

Its share of the global smartphone market has plunged to less than 10 percent from 50 percent during its heyday, before the iPhone was launched in 2007.

Windows phones have only captured 3.7 percent of the global smartphone market, according to Strategy Analytics. Android phones have 68 percent, while Apple has 17 percent.

For Microsoft, successful Lumia sales could convince more handset makers and carriers to support its Windows Phone 8 software, which promises faster performance and a customizable start screen.

Last week Samsung became the first to announce a smartphone running Windows Phone 8, at the IFA trade show in Berlin. But it was not able to provide the model to visitors at the show.

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