The delay comes at the wrong time. Already, the largest handset maker in the world has had a hard time competing against other smartphone makers, such as Apple (NSDQ: AAPL), RIM (NSDQ: RIMM), or manufacturers developing phones based on Google’s Android. The company has already been forced to drop prices. In the first quarter, it charged on average 155 euros for a smartphone, down from 190 euros in the third quarter—or much lower than Apple’s average selling price of $622 per iPhone.

Nokia’s smartphone shipments are also not growing as fast as others. It said during the first quarter, smartphone sales jumped 50 percent compared to the same period a year. During the same time period, for comparison, Apple saw iPhone sales jump by 131 percent.

The latest phones, based on the updated Symbian operating systems, will now be announced sometime before June, and rolled out in the third quarter. The update is expected to improve the user interface, which up until now has been criticized as offering a clunky experience. Carolina Milanesi, an Egham, U.K.-based analyst at Gartner told Bloomberg that Nokia’s smartphone reputation is suffering: “Unfortunately it’s not Mercedes-Benz or BMW that I think of when I think of them today. Ford is what comes to mind. Reliable, not expensive, and I get a bit more than I paid for.”