VALUE SHARE

High-end products are important for Nokia because the company has not only lost market share in this segment but its average selling prices have declined faster than the industry average.

Goldman Sachs expects Nokia's value share (a measure reflecting average prices as well as underlying market share) for phones costing more than $350 to decline to 13 percent this year from 33 percent just two years before.

"Maemo's got to be the best bet Nokia has in that battle." said eQ Bank analyst Jari Honko.

Linux is the most popular type of free or open source operating system. It competes directly with Microsoft Corp, which charges for its Windows software and opposes freely sharing its code.

Linux suppliers earn money selling improvements and technical services.

Nokia has already talked about its work with Linux-based systems.

"Maemo is taking the desktop Linux environment and making it mobile," Kai Oistamo, the head of Nokia's key phone unit, told Reuters in a recent interview. "We have proven it really can be made, you can take desktop Linux and make it work on mobile."

Linux has had little success in cellphones so far but its role is increasing with Maemo and also with Google using it for its Android platform.

Nokia's bet on Maemo does not mean the firm would replace Symbian software -- at the same time it is moving Symbian extensively into its cheaper phones, expanding its target market.

Confirming the trend, Nokia on Tuesday unveiled a new touch screen smartphone, the 5230, which runs Symbian and is expected to sell for just 149 euros ($213.4), excluding operator subsidies and local taxes.

(Editing by David Holmes)

($1=.6983 Euro)