Nokia and Microsoft have announced plans for a 'broad strategic partnership' to combine Nokia's hardware and Microsoft's Windows Phone 7 operating system.
In a move widely tipped before the event, the world's largest mobile phone maker has essentially jettisoned its own efforts to develop an operating system to compete with Apple's iOS and Google's Android, instead choosing to adopt Microsoft's newly launched Windows Phone 7.
"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," said Nokia CEO Stephen Elop at a joint news conference in London.
"Nokia and Microsoft will combine our strengths to deliver an ecosystem with unrivalled global reach and scale. It's now a three-horse race."
Elop's statement signals that the Nokia Microsoft alliance plans to go head to head with Apple's iOS and Google's Android ecosystems.
Nokia will contribute expertise on hardware design and language support, and tellingly the firm's announced that Nokia is to assist in bringing "Windows Phone to a larger range of price points, market segments and geographies."
Currently Windows Phone 7 devices are all of almost identical specification and pitched at the high end smartphone market. Nokia has a great many models right down into the so-called 'feature phone' low end range.
The declaration points towards a strategy of bringing Nokia Windows Phone devices to a more main stream market and comes the same day rumours appeared suggesting Apple plans for smaller and cheaper iPhones.
"I am excited about this partnership with Nokia," Microsoft CEO Steve Ballmer at the event.
"Ecosystems thrive when fueled 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."
A YouTube video of the Elop and Ballmer joint statement can be seen below: