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Nokia has cut the prices of phones across its portfolio in late January, reports Reuters. This looks set to allow its more affordable smartphones to compete more aggressively with rivals Sony Ericsson and Samsung.

According to Reuters, Nokia says price changes are part of its normal, ongoing business.

"The world's top cellphone maker usually cuts prices across its portfolio a few times each year.

Several industry sources told Reuters Nokia had cut prices by up to 10 percent.

After the price cut Nokia's cheapest smartphone model, the 5230, retails for around 170 euros ($239) in Finland. The model's wholesale price is now below 120 euros.

Demand for cheaper smartphones has helped the segment grow despite the recession, defying the broader, weaker industry trend. Sales jumped 30 percent in the October-December quarter according to research firm Strategy Analytics.

During its results presentation last week, Nokia said that smartphone revenue jumped 26% in the quarter from the previous quarter to 3.9 billion euros. The average wholesale price of its smartphones fell to 186 euros from 190 euros in Q3.

"The falling prices have hurt handset vendors like Sony Ericsson, who have focused on mid-range or feature phones, which often boast good cameras or music players but lack computer-like open operating systems.

These have been cheaper than smartphones, but the price difference is declining fast.

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