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Finnish handset developer, Nokia Corporation (NOK - Analyst Report) is set to unveil cost-friendly smartphones on Google Inc.’s. Android at the Mobile World Congress trade show in Barcelona later this month.The launch is scheduled just prior to Nokia’s planned divestiture of its handset business to Microsoft Corp. (MSFT - Analyst Report) for $7.2 billion. The deal is expected to close by the end of first-quarter 2014.

However, Nokia’s Android smartphone will not comprise Google Play Store or other apps of Google. The device will consist of its own proprietary app store and pre-installed apps like Here Maps and Mix Radio.

Increasing popularity of Android smartphones has compelled Nokia to launch an Android smartphone. According to Gartner Research, sales of Android smartphones in 2013 increased 74%, whereas sales of Windows Phones declined 5% year over year. Notably, sales of the Nokia’s flagship Lumia smartphone series, based on Windows Phone 8 operating system, also declined to 8.2 million in the fourth quarter from 8.8 million in the preceding quarter.

We believe Nokia’s low-cost Android Phone is expected to boost its handset business besides safeguarding its position against major smartphone manufacturers like Apple Inc. (AAPL - Analyst Report) and Samsung. The device is also expected to gain popularity in the emerging markets.

However, the exclusion of the popular Google Play Store and other well-liked Google apps on Nokia’s smartphone is likely to mar sales.

Recently, Nokia reported its fourth-quarter results, where earnings surpassed the Zacks Consensus Estimate but revenues lagged the same.

Nokia currently has a Zacks Rank #2 (Buy).

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