Microsoft, Nokia Announce Alliance, Office Apps on Smartphones

Microsoft and Nokia will team up to offer a mobile version of Microsoft Office for Nokia's smartphones, starting with the phone-maker's business-oriented Eseries before expanding into other lines. The two companies will continue to compete in other areas, particularly mobile operating systems, where Microsoft is pushing Windows Mobile and Nokia is backing its Symbian OS. However, the alliance could allow them to compete more effectively in both the consumer and enterprise markets against the likes of Apple and Research in Motion.

Microsoft and Nokia have announced a partnership that will see Microsoft Office applications ported onto Nokia smartphones, starting with the Nokia Eseries, which are primarily marketed towards business users.

The Microsoft and Nokia executives announcing the deal took pains to emphasize that the new partnership will in no way blunt the companies' competition over their respective mobile operating systems, Windows Mobile and Symbian.

According to Stephen Elop, president of Microsoft Business Division, the agreement marks the first time that Microsoft "will develop rich mobile office applications for another smartphone platform." He added that the collaboration would "expand into other areas over time."

Even though Nokia will assist in pushing this mobile version of Office to roughly 200 million smartphone owners, competition between the two companies will apparently still continue in other areas.

"We remain deeply committed to Windows Mobile," Elop said. Referencing the Nokia executive presenting alongside him, Kai Öistämö, he added: "I know when I talk to Kai, they are equally devoted to Symbian."

"The world's leading smartphone operating system," Öistämö, executive vice president for Nokia Devices, said in response.

Click here for more information on the Nokia N97 smartphoneElop categorized the agreement as "a long-term relationship for enterprise-grade solutions for mobile productivity." In addition to a mobile version of Office, Microsoft and Nokia will also offer management and collaboration software such as Microsoft SharePoint. Although both executives largely avoided discussing the new alliance's competition in the mobile device area, the intention to integrate Microsoft onto Nokia products beyond the business-oriented Eseries suggests that both Apple and Research In Motion are in the cross-hairs.

Microsoft has been concentrating on moving Office and its other productivity applications from its traditional desktop home. Earlier this summer, the company announced that Microsoft Office 2010, the newest version of the application suite, would be launched as a free online service for subscribers of Microsoft Live. The cloud-based versions of Word, Excel, OneNote and PowerPoint will not replicate the full functionality of the version being sold for desktop use, however.

The announcement also comes at a time when Microsoft is gearing up to enter the mobile space with Windows Mobile 6.5, which includes improved touch capabilities and widgets specifically designed to challenge competition from Apple's iPhone and the Palm Pre.

Microsoft has already opened its Windows Marketplace for Mobile to developers, hoping to seed its applications store with enough programs to at least make a reasonable showing when the new mobile operating system rolls out sometime in the fall.

Microsoft is hoping to have 600 applications available for Marketplace for Mobile by that point, and apparently plans a business-only section of the store in a deliberate attempt to appeal to that segment of the market. This new announcement with Nokia is obviously another part of that plan.