This historic announcement was made during the Nokia Investors Meet, which was held in London on Friday, Feb 11. Nokia CEO Stephen Elop described the alliance as a "three-horse race". According to the deal, Nokia will use Microsoft's Windows Phone 7 OS for its smartphones, which currently run on Symbian and Intel MeeGo.
"Today, developers, operators and consumers want compelling mobile products, which include not only the device, but the software, services, applications and customer support that make a great experience," Stephen Elop, Nokia President and CEO, said at a joint news conference in London.
"Nokia and Microsoft will combine our strengths to deliver an ecosystem with unrivaled global reach and scale. It's now a three-horse race," Elop added.
This agreement includes alliance in other areas like Map and Search services. While Microsoft's Bing will power Nokia's search services, Microsoft's mapping services will use Nokia Maps.
Under the proposed partnership:
* Nokia would adopt Windows Phone as its principal smartphone strategy, innovating on top of the platform in areas such as imaging, where Nokia is the market leader.
* Bing would power Nokia's search services across its several devices and services, giving customers access to Bing's next generation search capabilities. Microsoft adCenter would provide search advertising services on Nokia's line of devices and services.
* Nokia Maps would be a core part of Microsoft's mapping services. For example, Maps would be integrated with Microsoft's Bing search engine and adCenter advertising platform to create an unique local search and advertising experience.
* Nokia's content and application store would be integrated with Microsoft Marketplace for a more compelling consumer experience.
"I am excited about this partnership with Nokia. Ecosystems thrive when fueled by speed, innovation and scale.The partnership announced today provides incredible scale, vast expertise in hardware and software innovation and a proven ability to execute," said Microsoft CEO Steven A. Ballmer.
The alliance between Nokia and Microsoft will help the companies, which are both facing severe competition in the smartphone market from several other devices such as Google's Android and Apple's iPhone. So the big question now is: "Can Nokia WP7 phones defeat Android and iPhone?".