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Nokia and Microsoft form partnership to remain competitive

by Kelly MacNeil on February 11, 2011

Phonemaker Nokia has has announced that it will be incorporating Microsoft's smartphone operating system, Windows Phone 7, in future phones, according to MSNBC.com. This move comes at a time where both companies are struggling to compete with Google's wildly successful operating system known as Android and Apple's iPhone.

"Nokia and Microsoft will combine our strengths to deliver an ecosystem with unrivaled global reach and scale. It's now a three-horse race," Nokia CEO Stephen Elop said, the news source reports.

Elop represents another drastic shift in Nokia's strategy – he is the first non-Finnish employee to become the head of the Finnish company. While the phonemaker had previously tried to create its own internet searching functions, analyst Geoff Blaber perceive these moves to be a concession.

"This is a very frank admission that Nokia's platform strategy has failed and underlines the seriousness of Nokia's position. Such a move would have been unthinkable just 12 months ago," Blaber told the news provider.

One of the defining features of new Nokia phones will be the universal inclusion of Microsoft's Bing search engine. This may also help the software giant compete with Google in the search engine market.

Nokia had originally been using an open source operating system known as Symbian and had plans to develop a next-generation phone, MeeGo, according to Information Week. These plans may be scrapped altogether in light of the new alliance.

While the phonemaker may not be a forerunner in the U.S., it is still the leading provider around the world. Nokia's new partnership with Microsoft may be a preemptive maneuver, as some doubt that this lead can be maintained in the wake of the competitors' steady rise in popularity.

Windows Phone 7 has barely been acknowledged in the smartphone market – garnering only 2 percent of the industry share last quarter – and is rarely used outside of the United States.

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