Finnish mobile phone giant Nokia and Windows platform holder Microsoft have announced the formation of a strategic partnership that will see the Windows Phone 7 operating system embedded in future Nokia smartphones.
Rumours of the agreement first started circulating earlier this week.
Nokia will use Microsoft's Bing search service across all of its devices while Nokia maps will become a core component of Microsoft's own mapping services – particularly interesting considering Microsoft's 2007 takeover of online mapping service MultiMap.
Current Nokia OS Symbian will become a "franchise platform", with the company predicting further Symbian sales of 150m "in the years to come". Nokia's other OS MeeGo, which is run in collaboration with Intel, will become open source.
"Nokia and Microsoft will combine our strengths to deliver an ecosystem with unrivalled global reach and scale," Nokia CEO Stephen Elop stated. "It's now a three-horse race."
Microsoft chief executive Steve Ballmer added: "I am excited about this partnership with Nokia. 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."
The news comes in the wake of a leaked memo from Elop earlier this week which lamented the company's inability to keep track with opposition such as Google and Apple, claiming that Nokia is "standing on a burning platform".