By Lucas van Grinsven

MUNICH, Germany (Reuters) - Mobile phone maker Nokia entered a new market on Monday as it unveiled seven new devices, including one that doubles as a game console and takes aim at Nintendo's teenage hit product Gameboy Advance.

At its annual mobile Internet conference, this time in Munich, Nokia showed the N-Gage -- its first mobile phone that also allows consumers to play quality games, which are stored and distributed on memory cards, on a color screen.

The device, which will be introduced in February of 2003, is a direct challenge to Japan's Nintendo, which is expected to sell 12 million units of its Gameboy Advance across the globe this year, according to market research firm ScreenDigest.

Like Nintendo, Nokia said it would also become a games publisher.

"Nintendo is the one owning this market," Nokia's Executive Vice President for Mobile Phones, Anssi Vanjoki, told Reuters in an interview.

The games market is also contested by Sony Corp, Microsoft Corp and others aiming to move their console games to mobile devices but which have so far made no big announcements.

"The market is underdeveloped," Vanjoki said, adding that Nokia's innovations came from its position as a wireless player. The new device will allow multiple gamers to play against each other over short-range wireless Bluetooth connections or the wide-area mobile phone network.

The announcement, the first major push from any mobile phone maker to cater to the games market, hit analysts by surprise.

"They've stolen a march on Microsoft," said Neil Mawston at market research group Strategy Analytics, adding that Nokia still needed killer games to succeed in its new market.

CAMERAS AND COLOR

Nokia said Sega, a leading Japanese games publisher, will develop games for the N-Gage device.

Vanjoki also showed five more traditional color screen and camera phones, plus a new, fold-away model with a keyboard, catering to various consumer segments including the fashion conscious. They work on the popular GSM mobile system, which predominates in Europe, Africa and Asia.

Nokia phone launches are closely watched because of the company's dominant position in the wireless industry, supplying over a third of all phones sold to consumers worldwide.

Shares in Nokia were largely unmoved by the announcement as investors had already traded up the stock on anticipation the world's largest mobile phone maker would announce several new models. Nokia closed 7.6 percent higher at 17.78 euros in official trade, slightly outperforming European peers.

The new phones, which also included a small and expensive camera phone and a low-cost entry level model, further extended Nokia's product portfolio, already the broadest in the industry. "It doesn't leave much room for competition," Vanjoki said.

"We're convinced we're going to gain market share," he added, but declined to say when he thought the company could reach its target of 40 percent global market share from some 35.9 percent in the third quarter.

The company unveiled the 6800 model, which comes with a color display, supports so-called multimedia messaging service (MMS) and Java technology and has a cover that opens up into a full keyboard. It will be shipped to the European, African and Asian markets in the first quarter of next year.

The 7250 color screen fashion phone with a built-in digital camera will also be shipped in the first quarter as will the 5100, the 8910i and the 2100, Nokia said.

Nokia will start shipping the 6100 model, also with a color display, by year-end 2002.

Vanjoki said demand for its first camera phone on sale, the 7650, was outstripping supply. Nokia had already delivered over one million of these devices to telecoms operators and was on course to end the year with shipments of three million units.

Analyst Mawston, who applauded the new products, said Nokia still needed a clamshell product if it wanted to stop the victory march of South Korea's Samsung Electronics, which in the third quarter advanced to a market share of between 10 and 11 percent.

Clamshell products are particularly popular in Asia.

Nokia also unveiled a set of external speakers that can be attached to a phone to give stereo sound. A cellphone headset with a tiny digital camera attached to it was also unveiled.

(Additional reporting by Paul de Bendern in Helsinki)

Reuters