Nokia and Microsoft Juice Smartphone Fortunes: Tech Rumor of the Day

Microsoft and Nokia say they will team up to offer Office software on new devices to better compete with Apple, Google and Research In Motion.
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REDMOND, Wash. (

TheStreet

) --

Microsoft

(MSFT) - Get Report

and

Nokia

(NOK) - Get Report

say they will

team up

to offer Office software on new devices to better compete with

Apple

(AAPL) - Get Report

,

Google

(GOOG) - Get Report

and

Research In Motion

(RIMM)

.

The planned announcement Wednesday is the second partnership Nokia has struck with big tech giants in two months. In June, Nokia unveiled big mobile device plans with No.1 chip shop

Intel

(INTC) - Get Report

. And Wednesday's pact with Microsoft continues the dramatic shift from the Finnish phone giant's stubborn go-it-alone approach.

The rise of the smartphone challengers like Apple, RIM, Palm and Google's Android operating system have put Nokia on the defensive as its Symbian software powered devices

fail to gain much ground

outside Europe.

The deal with Microsoft will help put applications like Word and Excel on new Nokia devices and it also opens the way for Office features to run on bigger mobile data devices on faster wireless networks.

"This alliance could be part of Nokia's previously announced efforts to extend into larger screen-sized devices," writes JPMorgan analyst Steven O'Brien in a note Wednesday.

Nokia has enlisted its manufacturing partner

Foxconn

in

an effort to build mini-laptops

and netbooks that will run on 3G and 4G wireless networks.

Nokia also has plans to introduce a new crop of smartphones currently being developed under the project name

Nautilus

. These smartphones, due out early next year, have haptic or vibrating touchscreens and "hidden slide-out" QWERTY keypads.

To date, Nokia's attempts to win business customers to its phones have been limited -- largely due to RIM's success with fast, secure BlackBerry email service. Putting Office and, presumably, Microsoft Exchange software on a new generation of Nokia devices would give the company more business appeal.

For Microsoft, the move underscores the fading status of its Windows Mobile operating software in an increasingly non-Windows smartphone market. Bending to pressure from Google and

Sun Microsystems

(JAVA)

, Microsoft has made plans to offer browser-based or online versions of its Office programs.

The move comes as Google gains ground in mobile devices with its Android software, along with the plan to make a Chrome operating system to go against Microsoft in the mobile computing race.

--

Written by Scott Moritz in New York

.