Nokia will next week unveil a new, cheaper smartphone using Microsoft's Windows Phone software,

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targeting a wider market for its new range of smartphones, two sources close to the company said.

Cheaper phones are the key for Nokia and Microsoft in their battle to win a larger share of the market, analysts say.

In addition to the new Lumia 610 Nokia will also unveil at the Mobile World Congress trade show in Barcelona a global version of its high-end Lumia 900 phone, which AT&T is scheduled to roll out in the United States, the sources said.

Nokia is set to unveil the phones at a news conference next Monday, on February 27.

Nokia last year dumped its own smartphone software platforms in favour of Microsoft's Windows Phone, which has so far had a limited impact due to the high prices of phones using it.

Microsoft's share of the smartphone market fell to a mere 2 percent last quarter, compared with 3 percent a year ago and 13 percent four years earlier, according to Strategy Analytics.