Nokia won’t be stuck with stuck phone screens for long. The company is expected to unveil its first touch-screen iPhone 3G rival, dubbed the “Tube,” the Nokia 5800 series, on Tuesday. The Tube will be bundled with Nokia’s “Comes With Music” service, which brings one year’s worth of unlimited, DRM-free, downloads with the purchase of a Nokia phone. Following the termination of the year of free downloads, tracks can be kept without having to renew the subscription. Downloads are be both PC and mobile-based.

“The phone is extremely important,” said Gartner analyst Carolina Milanesi. “We have been waiting for the market leader to respond to Apple’s iPhone for a year and a half now. There is a lot of pressure on Nokia. With 3G they were late, but they got it right. They delivered and are the market leader. They did it with slim phones. They could do it with the touchscreen,” – she said.

Dubbed as ‘iPhone killer,’ Nokia Tube is expected to include an auto-focus 3.2 megapixel camera with GPS, and a 3.2-inch LCD touchscreen display with 16 million colors. The handset would be compatible with 3G HSDPA connectivity, and would include support for Java (which Apple has been reluctant to do with iPhone), Bluetooth, WiFi, GPRS,  as well as DVB-H technology (mobile TV standard for Europe).

Nokia Tube 5800 would come with 140MB internal memory and would support external SD memory cards. Moreover, the phone would also have a TV-output socket for a widescreen view, 3.5mm headphone jack, and a direct upload feature for videos and images. Users would be able to geo tag all images and videos, and the device is expected to include even more features as soon as the price and availability of the handset become officially confirmed.

Nokia executives have been talking up a possible touchscreen contender since April. Although Nokia is the world leader in mobile phone sales, with over 40% of total market share, it has been one of the slowest to add a touch screen phone to its catalog. With the Tube, Nokia will face tough competition from Apple, Samsung, LG, and Motorola. Research In Motion Ltd. is working on a touch-screen BlackBerry and Sony Ericsson plans to launch its Xperia X1 soon.