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With its first Lumia, Microsoft aims low

Gone is the Nokia label as the new Lumia 535 marks a modest step forward for Microsoft's mobile ambitions.

The Lumia 535 is the first handset from the line to dump the Nokia brand. CNET

The Microsoft Lumia 535 made its debut Monday, notable for being the first Lumia handset to lose the Nokia label.

The new handset runs Windows Phone 8.1, the latest version of Microsoft's mobile operating system, but the sequel to the Lumia 530 is decidedly aimed at the lower end of the market. It sports a quad-core 1.2GHz Qualcomm Snapdragon 200 processor and a 5-inch 960x540-pixel display. Like its predecessor, the Lumia 535 has a plastic back and clean lines with rounded corners, though in a bigger and slimmer package.

That is, it's not exactly a flagship phone intended to go after the high-end likes of the Apple iPhone, Google's Nexus 6 or Samsung's Galaxy line.

While the new phone marks a most modest restart for the handset lineup, Microsoft's branding may over time mean a new lease on life for Lumia smartphones, which have struggled in the marketplace. The smartphones, dressed in bright colors and sporting powerful cameras, have barely registered on the sales charts except in a handful of emerging markets.

Microsoft bought Nokia's phone business in April for $7.2 billion in a deal that allowed the division to continue to produce phones with the Lumia name adorned on them. The deal also allowed Microsoft to keep using the name Nokia on new phones for a brief time, but that brand is being phased out in favor of the name Microsoft Lumia.

The Windows Phone platform itself, which never reached far beyond Nokia's handsets, could use a jump start as well. The OS has yet to gain much traction with consumers, powering just 2.5 percent of the world's mobile devices, according to market researcher IDC. In comparison, Google's Android OS runs on nearly 85 percent of mobile devices worldwide.

In the short term, making phones isn't proving lucrative for Microsoft: restructuring costs associated with its absorption of Nokia have proved a drag on profit in its most recent financial results, although Microsoft sold 9.3 million Lumia phones in the quarter, up 5.6 percent from the record 8.3 million devices sold this time last year.

The Lumia 535 is headed for a number of countries, but not the US. Microsoft said that the pricing will be around 110 euros ( £85, AU$155 or, for comparison's sake at least, $135) , depending on the country and the carrier. It will arrive in November in Russia, Ukraine, China, Indonesia and the Philippines, and in December in Australia, Vietnam, Thailand and some unspecified parts of Africa. Then in January it will land in Latin America as well, and sometime in the first quarter of 2015 will come to the UK.

Check out CNET's hands-on impressions of the Lumia 535 here.

CNET's Aloysius Low contributed to this report.