Nokia, the Finnish mobile phone giant, took a step into the unknown today by launching its first-ever product without a built-in mobile phone.

The Nokia 770 is a hand-held internet browser for wireless broadband networks. The device, much like a small portable radio, has a 4in horizontal touch screen that can display normal internet pages.

Janne Jormalainen, the vice-president of convergence products at Nokia, said the 770 is aimed at consumers looking for an extra internet screen at home that was portable enough to carry in a handbag or pocket.

"With the Nokia 770 consumers can access broadband internet services away from their desktop, for example in the backyard or at a cafe with a wi-fi hotspot", Mr Jormalainen said.

The product, which can also connect to the internet via a Bluetooth link to a mobile phone, marks a significant strategy expansion for Nokia.

Last year the company announced falling mobile sales, despite buoyant growth in the market, after failing to offer clamshell-style phones pioneered by rival Samsung and popular with consumers. Nokia's market share in the UK tumbled from 60 per cent to less than 40 per cent.

Since then the company has been trying to develop alternative products, such as the N-Gage gaming device, but, until now, all products have included an integrated mobile phone.

The 770, which is purely an internet device, took Nokia two years to develop, and is an attempt at capturing part of the expanding portable computer market. Analysts expect that within two years more than half of all personal computers sold will be portable rather than desktops.

The product will run entirely on open source software, including a standard Linux operating system also used in desktop computers, marking more unchartered territory for Nokia.

"Linux is a logical choice for the Nokia 770 as Linux and the Open Source development platform provide us with fast and efficient solutions to build products for this new category. This is the first step in creating an Open Source product for broadband and internet services," Mr Jormalainen said.

Mr Jormalainen also said Nokia will launch regular updates to the product , including a software release next year that would controversially allow Voice over Internet Protocol (VoIP) and instant messaging.

VoIP technology allows users to transmit conversations for free networks using the internet. By allowing this form of communication on its products Nokia risks upsetting its main customers - the mobile phone networks - because it could reduce their call revenues.

But a spokesman for Nokia denied that there was any conflict, telling Times Online that mobile phones and VoIP-enabled devices were "completely different product categories".

"Use of VoIP technology is still limited to homes and hot spots so it is only smallish compared to overall mobile phone market. Mobile operators are our key customers and we listen very closely to what they hope to see from us."

Nokia said consumers who buy the product this year will be able to upgrade to the VoIP-enabled software free next year.

Nokia also said it would launch and support an open source community website, encouraging software developers to hack into the device in order to improve the product.

The 770 will sell for approximately £200 and will be available by the autumn.

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