Microsoft, Nokia Announce Alliance on Smartphones

In a press conference in New York this morning, Microsoft Business Division president Stephen Elop and Nokia’s executive vice president for devices Kai Öistämö announced that Redmond, WA-based Microsoft and Finland-based Nokia have formed an alliance that will create adaptations of Microsoft programs for Nokia’s smartphones.

Microsoft and Nokia will begin immediate development of Microsoft Office Mobile, a version of Office for use on Nokia’s Symbian devices. Other programs for productivity, communication and device-management will follow, and will be available for many types of Nokia smartphones. The deal extends beyond just development of the programs—the companies will jointly market the products they create together.

This is the second major recent alliance for Microsoft with a competitor, after making a major search and advertising deal with Yahoo just a couple of weeks ago. Similar to that deal, Nokia has been an important rival to Microsoft with its Symbian mobile OS competing with the Windows Mobile platform. This is the first time Office will be adapted for any mobile system besides Microsoft’s. And both deals help Microsoft compete with Google, whose free productivity applications have been chipping away at Microsoft’s Office dominance. Office is one of the most profitable products for Microsoft, so expanding the customer base seems like a good move for the company.

Nokia is the world’s largest producer of smartphones, but is facing intense competition from products like Apple’s iPhone and Research in Motion’s Blackberry. Putting Microsoft applications on its phones will help Nokia in “addressing the significant opportunity in mobile enterprise productivity,” according to Öistämö in the press release.

Eric Hal Schwartz was an intern in Xconomy's Seattle office. Follow @

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