Struggling Finnish cell phone maker Nokia has scrapped a software project which it had hoped would compete with mass-market Google Android phones, three sources with direct knowledge of the company’s plans said.

Nokia was hoping the Linux-based software platform, code-named Meltemi, would replace its ageing Series 40 software in more advanced feature phones, but has killed the project as part of its massive cost-cutting drive.

Scrapping the platform means loss-making Nokia will risk losing its strong position in the mass-market — where phones are priced at $100-$200. Nokia controlled more than 20 percent of this market in the first quarter, according to research firm IDC.

Nokia’s Chief Executive Stephen Elop flagged Meltemi in a leaked video in mid-2011, but Nokia has never officially confirmed Meltemi existed. It declined to comment on Thursday.

In June, Nokia said it would cut 10,000 jobs – one in five staff in its phone business – as it aims to pull the company out of the red. Talks over job cuts are scheduled to end this week in Finland.

One of the sources, who works at a supplier, said the original plan was for the first feature phones using Meltemi should to be on the market by now.

Smart-phones such as Apple’s iPhone which offer a platform for third-party application developers, is where the industry’s strongest growth is. But simpler feature phones, with limited support for third-party software, still account for most units sold.

Nokia’s Series 40 platforms are in around 2 billion cell phones, making it the most ubiquitous software in the market. But it lacks the smart-phone-like experience Meltemi could have offered.

Google’s Android platform has stormed the smart-phone market in its first few years. Last quarter it was used in roughly 60 percent of all smart-phones sold.

Nokia last year dumped its own smart-phone software platforms in favor of Microsoft’s Windows Phone, which has so far had a limited impact, in part due to the high prices of phones using it.

(Reuters)