The alliance is designed to shore up the two firms' stumbling efforts in smartphones.
“Nokia is at a critical juncture, where significant change is necessary and inevitable in our journey forward,” explained Stephen Elop, the former Microsoft executive hired by Nokia in September as the company’s first non-Finnish chief executive.
He added: "Today, we are accelerating that change through a new path, aimed at regaining our smartphone leadership, reinforcing our mobile device platform and realizing our investments in the future."
Some critics see the announcement as a dramatic admission of failure by Nokia.
Founded in 1865, Nokia is responsible for the manufacturing of mobile devices and in converging internet and communications revenue.
It is, in fact, the world's largest manufacturer of mobile phones, with a 31 per cent of the global device market share in the fourth quarter of 2010.
