Struggling Finnish smartphone specialist 'now in a three-horse race'

Nokia unites mobile business with Microsoft

Telecoms giant Nokia has announced a major strategic alliance with Microsoft, in a new bid to revitalise its ailing mobile business.

Future Nokia smartphones will run on Microsoft’s Windows Phone 7 operating system, the company has announced.

Nokia’s existing mobile operating systems, such as Symbian, are to be gradually sidelined.

What the deal means for the Ovi Store, or any of Nokia’s development platforms, remains to be seen.

The announcement comes days after Nokia CEO Stephen Elop warned staff that the company was “standing on a burning platform”.

Today he says the smartphone market is “now a three-horse race".

Esop added: “Nokia and Microsoft will combine our strengths to deliver an ecosystem with unrivalled global reach and scale.”

Steve Ballmer, Microsoft’s Chief Executive, said: "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."

Microsoft’s Bing will now run on Nokia’s search services, the companies said. Meanwhile, Nokia’s own Maps service will be integrated into Microsoft’s mapping services.

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