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Nokia forges smart-phone alliance with Microsoft

The majority of Nokia handsets will be equipped with Windows Phone software in the future under the partnership agreement with Microsoft.

February 12, 2011|By Nathan Olivarez-Giles, Los Angeles Times

Nokia is set to pair its hardware with Microsoft's Windows Phone software in an effort to fend off increased competition from Apple's iPhone, Google's Android operating system and Research in Motion's BlackBerry handsets.

Nokia, the world's largest mobile phone maker, made the widely expected decision official on Friday morning during a London news conference.

"The entire smart phone market is growing rapidly, and we should be setting the pace," said Nokia Corp. Chief Executive Stephen Elop. "The game has changed from a battle of devices to a war of ecosystems."

In an internal memo leaked to the media Wednesday, Elop used much more dramatic language, writing that the company was "standing on a burning platform" with "more than one explosion — we have multiple points of scorching heat that are fueling a blazing fire around us."

Microsoft Corp.'s Windows Phone software, currently in its seventh iteration, will replace Nokia's Symbian operating system on the majority of handsets from Nokia after the two companies complete a partnership agreement, Elop said, not offering specifics on when that would be.

The agreement will also give Microsoft access to Nokia's worldwide mapping and navigation services and access to large cellphone carriers in international markets that it hasn't had before, Elop and Microsoft CEO Steve Ballmer said in a statement.

"In this partnership with Nokia, Microsoft brings its Windows Phone software and the brands mobile consumers want like Bing, Office and of course Xbox Live," Ballmer said Friday.

Nokia's mapping and navigation technology will be integrated into Microsoft's mapping services, such as maps used in the Bing search engine, and Microsoft's AdCenter business will also sell and distribute ads across Nokia phones, the companies said.

Although Finland-based Nokia is choosing the Windows Phone 7 as its main presence in the smart phone market, the company made clear that it was not planning to completely abandon its Symbian and under-development MeeGo operating systems.

The "long-term strategic alliance" represents a major departure from Nokia's past strategy in the smart-phone market, which had the homegrown Symbian at the core.

In January, Android dethroned Symbian as the world's most used smart phone operating system, a title Symbian had held since the smart phone era dawned about a decade ago. Google's Android OS is comparatively young, having debuted in 2008.

Elop is fairly new to Nokia, having been hired as CEO last September from a senior executive position at Microsoft. He is also the first non-Finn to run Nokia, a company that is looking to him to turn around its large losses of market share in the United States and Asia.

Nokia accounted for about 41% of the global mobile phone market in 2008, but that number fell to about 31% in 2010, according to the Associated Press. Despite the falling numbers, Nokia remains the world's top seller of mobile phones.

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