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Nokia N900

The Finnish company experimented with Linux in 2005 using it in the Nokia 770 "Internet Tablet" -- a phone-like device used to browse the Web but failed to gain mass-market appeal due in part to its lack of cellular calling.

"I'm sure this will help us in the market situation with iPhone," said Anssi Vanjoki, Nokia's head of sales. "This thing has been moving at a very well-planned pace long before there was any sign of an iPhone."

Nokia handsets that use the Symbian operating system control half of the smartphone market volume -- more than Apple's iPhone, Research in Motion's BlackBerry and Google's Android devices combined.

Nokia's move from its usual Symbian OS to the Linux-based Maemo will give the new N900 a more "PC-like experience" -- letting users run dozens of application windows at the same time.

"This is in no way putting Symbian in jeopardy," said Vanjoki. "Open source Symbian is going to be our main platform, and we are expending and growing it the best we can, both in terms of functionality as well as distribution populating more and more of our product line with Symbian."

The N900 uses ARM's Cortex-A8 processor and features a high-resolution WVGA touch screen. Its browser is powered by Mozilla technology so Web sites look the way they would on a computer.

Online videos and interactive applications are vivid with full Adobe Flash 9.4 support.

Messaging is quick with the slide-out QWERTY keyboard. It has 32GB of storage, which is expandable up to 48GB with a microSD card. For photography, the smartphone has a 5.0-megapixel camera with Carl Zeiss optics.

After earnings dropped 66 percent last quarter, Nokia said has been expanding into the lucrative high-end smartphone market.

Last month, the company reached a deal with Microsoft to port Office to its smartphones.

Nokia also plans to launch a financial payment service for mobile phones that lets customers send money to another person, make purchases or pay bills using their smartphone.

Nokia said the N900 will start selling in October for about $710, excluding possible store discounts.