Nokia today announced the Nokia 5530 XpressMusic, a cheaper version of its successful touch phone, the 5800 XpressMusic.

The Nokia 5530 XpressMusic, which also uses a touch interface, will cost €199 ($435) before taxes and subsidies. When the 5800 XpressMusic was announced in October last year it was listed at €279 before taxes and subsidies.

The phone is yet another example of how the line between smartphones and cheaper mid-tier phones is being blurred, according to Ben Wood, analyst at CCS Insight.

"It's definitely for people who can't afford an iPhone, and that is not a negative thing by the way. There are people who want that experience, but can't justify the expense of an iPhone," said Wood.

The 5530 XpressMusic has a 2.9-inch widescreen display and comes with a 4GB memory card for storage. Users can surf the web using GPRS or wi-fi data connections.

The lack of 3G support is all about keeping costs down, according to Wood.

The user interface includes what Nokia calls a "people carousel." It provides access to up to 20 contacts -- which are represented using thumbnail images -- and their communications history including emails, phone calls, photos or other social media updates.

Nokia sold 2.6 million of its 5800 XpressMusic during the first quarter, making the smartphone one of the highlights of an otherwise gloomy quarter, so it comes as no surprise that the company wants to build on that as it tries to turn around its fortunes.

The Nokia 5530 XpressMusic will start shipping during the third quarter.