In what can be seen as a last-ditch effort by Nokia to regain some of its lost glory in the smartphone market and to catch up with Apple and Google, the Finnish handset-maker has joined forces with Microsoft.

The Nokia-Microsoft partnership implies that Nokia’s handsets will henceforth be powered by the Microsoft Windows Phone 7 operating system. In addition, Nokia will also use Microsoft’s Bing search engine on its handsets; thereby giving Microsoft an added advantage in terms of taking on the Internet search giant Google. The alliance between Nokia and Microsoft comes at a time when Nokia has been witnessing a decline in its global smartphone market share; and Microsoft is struggling to project its Windows Phone 7 OS as a viable contender against the Apple iOS and the Google Android.

Industry observers are of the opinion that the partnership marks a potential breakthrough for Microsoft, which has been trying its luck – without any notable success - in the mobile arena for years now. A deal with Nokia will give the company a chance of getting its software into more than of 30 million smartphones sold by Nokia every quarter.

Noting that Nokia and Microsoft have “made the leap” but the alliance “is all going to be about execution,” research firm Gartner’s Michael Gartenberg said the prospects of the partnership will largely depend on whether Nokia and Microsoft can “get US carriers excited about a Windows device that's built by Nokia.”