Its first low-cost smartphone, the Lumia, is aimed at first-time smartphone buyers — the vast majority of the country's users who are migrating to smartphones and third-generation (3G) wireless broadband service.
"At least 20 million mobile users in Thailand have the potential to shift to 3G mobile service," said Nontawan Sindhavananda, Microsoft Devices Group Thailand's head of marketing.
"Our move is a determined push to reach the mass-market consumer in the country."
The Nokia Lumia 530, the new addition to the Lumia family, retails at only 3,690 baht. The Windows 8.1 OS phone featuring dual SIM 3G and quad-core processor is positioned as an affordable model.
The phone will become one of Nokia's main handset offeringss.
Nokia previously offered mobiles for no lower than 5,000 baht, said Ms Nontawan.
German market research firm GfK said smartphones priced from 3,000 to 7,000 baht accounted for 20% of Thailand's overall smartphone sales.
The local smartphone market is expected to reach 15 million units this year.
Microsoft recently announced a major lay-off of up to 12,500 Nokia employees.
The company is focusing on promoting its low-cost Windows Phones while terminating Android-based Nokia X projects.
Microsoft also announced it would terminate production of Nokia's other low-end platform Asha.
Ms Nontawan said this would allow Microsoft to put more resources into promoting Lumia smartphones, focusing on the Windows operating system as an alternative.
She acknowledged that competition in the local smartphone market had been intensifying due to the influx of new Chinese smartphone makers.
But Ms Nontawan is confident that Nokia will be able to retain its competitive advantage over its rivals.
Pakorn Manorompatarasarn, Total Access Communication's vice-president for the postpaid segment and device marketing, said DTAC was working with Nokia to promote the Lumia 530 under a 20-million-baht marketing budget.