Nokia to partner with Microsoft on smartphone strategy

Following much speculation on the likely direction of Nokia's smartphone strategy, it has confirmed a broad strategic partnership with Microsoft to create a "new global mobile ecosystem". The announcement was made at a joint news conference in London this morning.

In recent years Nokia has lost significant market share to Google's Android platform and the Apple iPhone, both of which have made a significant impact in the high-end smartphone market.

At the news conference, Stephen Elop, Nokia president and CEO, said: "Developers, operators and consumers want compelling mobile products, including the device, as well as the software, services, applications and customer support.

"Nokia and Microsoft will combine strengths to deliver an ecosystem with unrivalled global reach and scale. It's now a three-horse race."

Nokia will adopt the Windows Phone 7 as its principal smartphone platform, and Microsoft's Bing search engine will be delivered across services and devices.

Nokia's content and application store will also be integrated with the Microsoft Marketplace in the hope of delivering an app store to rival the Android and Apple app markets.

"I am excited about this partnership with Nokia," said Steven Ballmer, Microsoft CEO.

"Ecosystems thrive when fuelled 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."

Earlier this week Nokia was rocked when an internal memo from Elop, in which he likened the firm's position to that of a man "standing on a burning platform", was leaked.

In the memo, Elop made reference to Nokia's deficiency in the high-end smartphone range.

"The first iPhone shipped in 2007, and we still don't have a product that is close to their experience.

"Android came on the scene just over two years ago, and this week they took our leadership position in smartphone volumes. Unbelievable," said Elop in the memo.

Elop added that his organisation had to "change [its] behaviour" to deal with these threats.