(Updates stock prices)

Searching for help in a wireless device market that's rapidly undercutting their core businesses,

Intel

(INTC) - Get Report

and

Nokia

(NOK) - Get Report

have decided to work together on new mobile-chip efforts.

The two companies hosted a joint press conference Tuesday to announce the "multi-year collaboration."

In its simplest terms, the planning seems centered on Nokia's desire to make Linux-based netbooks with Intel's help. And chipmaker Intel agreed to license Nokia's 3G wireless technology, presumably to make both processors and the wireless modems to connect gadgets to the Internet.

Both companies said it was too early to speculate on the types of devices that might spring from this collaboration.

Nokia is very interested in making a new generation of mobile Internet devices. As

TheStreet.com

has reported, Nokia is

planning to make netbooks. And No. 1 PC maker Hewlett-Packard (HPQ) - Get Report, as we reported earlier this month, is working with its contract manufacturer Foxconn to make so-called smartbooks

using

Qualcomm

(QCOM) - Get Report

chips.

The move by Intel is yet another attempt to crack the mobile market dominated by Qualcomm and

Texas Instruments

(TXN) - Get Report

. Intel's Atom processor has been a win with netbook makers, but it has cannibalized the company's dual core processor chip business.

On thing seems clear: The push by PC suppliers toward Linux-based device operating systems also all but guarantees that

Microsoft

(MSFT) - Get Report

will eventually fashion a version of its new Windows 7 software for the Linux machines.

The hard-charging but nonspecific plans help boost Intel shares 1.2% to $15.87 and pushed Nokia up 2.8% to $14.47 in afternoon trading Tuesday.