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Microsoft Corporation (MSFT - Analyst Report) launched its first Android smartphone — X2 — under Nokia’s (NOK - Analyst Report) X family of low-cost devices.

The new handset has larger display, improved rear-facing cameras and better performance compared to the original Nokia X. Powered by Google’s (GOOGL - Analyst Report) Android OS, Nokia X2 offers a 4.3-inch ClearBlack display, 5-megapixel rear camera, VGA front camera, 4GB internal storage, 1GB RAM and Snapdragon 1.2GHz dual-core processor, while the original Nokia X had a 1Ghz processor.

Nokia X2 comprise Nokia app store where services like OneNote and Yammer will be available for free download. Users will be able to access both Android and Microsoft services like Bing search, OneDrive, Outlook.com and Skype through the device in addition to third-party titles such as LINE Ranger, Brewster and Findery.

Currently available in select countries for €99, Nokia X2 will be rolled out globally in July. The device will be launched in three colors — green, orange and black — and the yellow, white and matte dark grey models will come up later.

The launch of a new smartphone would help Microsoft gain traction in the fast-growing mobile and cloud-computing markets. Not only will a cheaper version of Android-based X2 phones entice entry-level phone buyers, who otherwise might not buy Windows phones, but it will also appeal to Android-users.

According to the research firm Gartner, sales of Android smartphones in 2013 soared 74%, whereas Windows Phone sales declined 5% year over year. Leveraging Android’s popularity over Microsoft’s Windows Phone, the release of Nokia X2 is poised to help Microsoft reach its apps and services to more users.

In April, Microsoft acquired Nokia’s Devices & Services Business, now named Microsoft Mobile Oy. Nokia created the Lumia series of smartphones that run on Microsoft's Windows Phone operating system. Windows Phone has a limited market share in comparison to Apple’s (AAPL - Analyst Report) iOS and Google’s Android. The release of Android-based Nokia X2 could help Microsoft to improve the situation by increasing its share in the global smartphone market.

Microsoft currently sports a Zacks Rank #2 (Buy).

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