Reports citing sources close to both firms said the alliance will allow Nokia users to access the Microsoft Office suite of desktop applications on their mobile phones.
Making the announcement is Stephen Elop, president of Microsoft Business Division, and Kai Öistämö, executive vice president for Nokia Devices.
Nokia remains the dominant player in the mobile market with a 37 per cent share, according to Gartner statistics released today.
The news is likely to agitate Google, Microsoft’s rival in supplying word processing and calendar applications.
Last week Google launched a new campaign on the Google Apps homepage that calls on businesses to "Join the movement. Spread the word. Go Google".
Still, although Google claims 1.75 million businesses use Google Apps, this is a small number compared with the amount of businesses using Office.
A recent Forrester survey of 152 IT decision-makers found nearly 92 per cent support Office, while only a little more than three per cent use Google Apps.
Office is Microsoft's prime source of revenue, and is forecast to generate about $20bn (£12.2bn) in revenue this year.
In related news, Microsoft has been found guilty of patent infringement relating to a document formatting feature in Word and has been banned from selling the software in the US.
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