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Microsoft's new Nokia Internet phone costs...$29

Microsoft has unveiled a budget, Internet-connected phone under the Nokia brand, which will cost $29, as it steps up its efforts to capture the rapidly-growing emerging market consumer.

The Nokia 215's Internet connection – albeit 2G – sets it apart from Microsoft's other low-end devices, giving users access to Facebook, Twitter, a weather app and a web browser.

Nokia's new phone to retail at... $29

The Redmond, WA-based technology giant is billing the so-called feature phone as a chance to tap into users who have never been connected to mobile Internet.

"With our ultra-affordable mobile phones and digital services, we see an inspiring opportunity to connect the next billion people to the Internet for the first time," said Jo Harlow, corporate vice president of Microsoft Devices Group, in a statement.

The Nokia 215 will be released in "select markets" in the Middle East, Africa, Asia and Europe in the first quarter of this year. Microsoft also claims the phone has battery life of up to 29 days.

Internet key

It comes as the low-end of the market is getting increasingly crowded. As the premium smartphone market – including devices like Samsung's Galaxy range and Apple's iPhones -- begins to mature, manufacturers are looking at ways to capture consumers in developing markets.

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As competition increases, cheap phones with Internet connections and quality features will be key, analysts said.

"This has been the expectation in the smartphone market and that is going to bleed into the feature phone market. The Nokia 215 is Microsoft's bid to be a part of that," James Moar, research analyst at Juniper Research, told CNBC by phone.

Nokia brand 'trust'

Nokia 215
Source: Microsoft

Microsoft acquired Nokia's devices business last year for 5.44 billion euro ($7.5 billion). Since then, the company has released the ultra-low-cost 19-euro feature phone called the Nokia 130. The U.S. company also released a more expensive smartphone in November, but from the device.

By keeping the Nokia name on its low-end devices aimed at emerging markets, Microsoft can leverage its brand credibility with consumers in those countries who may not be familiar with Microsoft as a phone maker, one analyst told CNBC.

"Nokia globally is a brand based on trust and familiarity," Paul Davies, senior technology analyst at Mintel, said.

"Microsoft has picked the Nokia brand because it doesn't damage the bigger picture of their device strategy. It makes sense for them to have a cheap phone, but to keep it separate from their bigger brand direction in the smartphone category."