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Nokia plans to get Microsoft's Windows Phone 7 OS

The announcement by Stephen Elop, the former Microsoft executive hired by Nokia in September as the company's first non-Finnish chief executive, was an admission of failure by Nokia, which had helped define the mobile phone age in its infancy. The alliance is also a gamble, perhaps a last-ditch effort for both Nokia and Microsoft to gain a lasting foothold in the booming market for sophisticated smartphones, where Apple's iPhone and Google's Android software are leading the way in technology innovation. Learn to Play HD MKV video on HTC HD7..

"Nokia is at a critical juncture, where significant change is necessary and inevitable in our journey forward," Mr. Elop, a Canadian who led Microsoft's business software division before moving to Nokia, said in a statement. "Today, we are accelerating that change through a new path, aimed at regaining our smartphone leadership, reinforcing mobile device platform and realizing investments in the future."

Microsoft's operating system software dominates the PC industry. But mobile devices like smartphones are expected to surpass desktop and laptop computers this year as the main way to gain access to the Internet. Microsoft has only 2 percent of the global market for phone software.

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