Nokia ties up with Microsoft to take on Apple, Google

Technology titans Nokia and Microsoft are combining forces to create smart phones that might challenge rivals like Apple and Google and revive their own fortunes in a market they have struggled to keep up with.

Nokia Corp., the world's largest maker of mobile phones, said Friday it plans to use Microsoft Corp.'s Windows Phone software as the main platform for its smart phones in an effort to pull market share away from Apple's iPhone and Android, Google's software for phones and tablets.

Nokia said it will help drive the future of Windows Phone "innovating on top of the platform in areas such as imaging, where Nokia is a market leader."

Moving increasingly to providing services for phone users, Nokia and Microsoft "will combine our strengths to deliver an ecosystem with unrivaled global reach and scale," Nokia's CEO Stephen Elop said in a statement.

"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," he said.

Nokia's share price plunged more than 9 percent to euro7.42 ($10.09) in early morning trading in Helsinki.

The announcement came just hours before Elop was to address an analyst conference in London where the new Canadian CEO was expected to announce major changes for ailing Nokia that has seen market share plunge from a high of 41 percent in 2008 to 31 percent in the last quarter of 2010.

The Finnish firm is no longer the innovative trailblazer in a race where the iPhone has set the standard for today's smart phones and Research In Motion Ltd.'s BlackBerrys have become the favorite of the corporate set. More recently, Google Inc.'s Android software has emerged as the choice for phone makers that want to challenge the iPhone.