Nokia unveiled a new C5 smartphone model on Tuesday, hoping to benefit from a booming demand for cheap smartphones and from rising consumer appetite for mobile social networking.

The C5 handset will be one of the cheapest smartphones from Nokia, selling for 135 euros ($183), excluding taxes and subsidies, and hitting the shelves next quarter.

'It is products like this that will grow Nokia marketshare in the smartphone segment and help them to increase their average sale prices,' said John Strand, chief of telecoms consultancy Strand Consult.

Volumes on the smartphone market are seen surging in 2010, with some analysts forecasting up to 50 per cent growth, as handset vendors are pushing advanced features, once exclusive to pricey top-end models, into cheaper and cheaper phones.

Nokia continues to lead the global smartphone market with an around 40 per cent market share, but it has lost ground to Apple's iPhone and RIM's Blackberry.

The Finnish firm is in the midst of a massive revamp of its smartphone offering and has said in 2010 almost all of its smartphones would have a touch screen, a full keyboard or both, compared with less than half in 2009.

Name confusion

After introducing the C series -- focused on personal social networking -- Nokia has four smartphone product families. The E series phones are for business users, X series for youth and music, and N series for the most advanced models.

It plans to use the new names across its smartphone offering.

Nokia has historically flooded the market with phone models little different from each other, with additional confusion arising from their four digit names, which have been hard to differentiate for consumers.

However, the new naming of X series phones may also create confusion as Sony Ericsson has used the name for few years -- X1 and X2 smartphones are from Sony Ericsson, while Nokia has launched the X3 model.

Sony Ericsson's new flagship device is the X10, while Nokia is also widely expected to launch an X10 cellphone. – Reuters