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.
"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 our mobile device platform and realizing our investments in the future."
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