Nokia and Microsoft said on Thursday that the two companies have signed an agreement worth "billions of dollars" to put the Windows Phone OS on Nokia handsets, along with other collaborations.

"In recognition of the unique nature of Nokia's agreement with Microsoft and the contributions that Nokia is providing, Nokia will receive payments measured in the billions of dollars," the two companies said in a joint statement.

However, Nokia won't be the only company getting paid in the now-official deal.

The two tech giants said Microsoft was going to receive "a running royalty from Nokia for the Windows Phone platform, starting when the first Nokia products incorporating Windows Phone ship."

Just how much the royalties would add up to wasn't disclosed, but the companies said "the royalty payments are competitive and reflect the large volumes that Nokia expects to ship, as well as a variety of other considerations related to engineering work to which both companies are committed.

"Microsoft delivering the Windows Phone platform to Nokia will enable Nokia to significantly reduce operating expenses."

The exact length of the long-term deal between Microsoft and Nokia wasn't disclosed Thursday, but the first Nokia phones running the Windows Phone OS are scheduled to land in stores by 2012.

The two companies also said they've made "significant progress on the development of the first Nokia products incorporating Windows Phone" and have assigned hundreds of employees on getting the new smartphones out into the market.

The agreement also calls for the upcoming launch of a new Nokia-branded "global application store" built on the Windows Marketplace infrastructure to sell apps for Nokia devices.

The new Nokia storefront for mobile apps will allow developers to publish and distribute applications "through a single developer portal to hundreds of millions of consumers" that use the Windows Phone OS, Nokia's internally built Symbian OS and other Nokia phones, the statement said.

Mozilla's Firefox 4, the latest release of one of the Web's most popular browsers, is now available as an Android app.

The Firefox 4 app hit Google's Android Market on Tuesday and includes a few features designed to connect desktop or laptop browsing to smartphones and tablets.

Users can sync their browsing history, bookmarks, tabs and passwords on every computer, smartphone and tablet they have -- as long as they have Firefox installed.

The Firefox 4 app can even launch websites on an Android device right where a user left off on the Firefox 4 browser at home. This feature, for example, could be used to find directions on a website on a home or work computer, then pull up the same site and information on an Android phone.

In typical Firefox fashion, Mozilla has added plug-in "personas" that allow users to change the colors and even add images to the toolbars in the browser.

Firefox 4 for Android (versions 2.0 and newer) also features an "Awesome Screen" that enables one-tap access to bookmarks, history and a user-curated list of search engines.

Twitter integration, tabbed browsing, search for text on a Web page and saving images from websites to a PDF format are other included features.

And Firefox 4 for Android is also available in more than 10 languages as of launch day.

Mozilla, being the open-source and nonprofit community of programmers both paid and volunteer that it is, also released a Firefox app for Maemo on Tuesday. Maemo is a Linux-based open-source operating system for Nokia devices.

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Images, top: Tabbed browsing in Firefox 4 for Android. Middle: Firefox 4 for Android's start page. Credit: Mozilla

Video: Mozilla shows off features in its Firefox 4 for Android app. Credit: Mozilla via YouTube

Microsoft has agreed to pay Nokia more than $1 billion to release smart phones running the Windows Phone operating system in a still-unsigned deal between the two companies, according to a report.

That money will be paid out over a five-year span, with some of it coming up front to help fund Nokia's development and marketing of the new line of phones, which have yet to be given a release date, according to a report from Bloomberg.

Microsoft, which launched Windows Phone 7, the latest version of its smart-phone OS, last fall, will be paid back royalties for each handset Nokia sells when the phones hit the market, Bloomberg said, citing two unnamed sources on the details of the agreement.

One of the Bloomberg sources said the contract hasn't been finalized or signed and that no timetable for when that might happen was offered. 

In a joint news conference with Microsoft Chief Executive Steve Ballmer, Nokia CEO Stephen Elop announced last month in London that the cellphone maker was choosing Windows Phone over Google's Android or even its internally developed Symbian as its main operating system for smart phones.

Elop, who was a Microsoft executive before heading over to run Nokia last September, made the announcement days after he reportedly sent a company memo in which he said Nokia was "standing on a burning platform" with "more than one explosion -- we have multiple points of scorching heat that are fueling a blazing fire around us."

In February, at the London announcement, Elop and Ballmer said Nokia and Microsoft were already working together on developing a line of phones running Windows Phone software, despite not having a contract signed back then.

Microsoft said then that it would gain access to Nokia's worldwide mapping and navigation services, as well as to large cellphone carriers in international markets that it hasn't had before.

Nokia accounted for about 41% of the global mobile phone market in 2008, but that number fell to about 31% in 2010, according to the Associated Press.

Despite the falling numbers, Nokia remains the world's top seller of mobile phones, but in January, Android dethroned Nokia's Symbian smart-phone operating system as the world's most used mobile OS.

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Top photo: Microsoft CEO Steve Ballmer delivers a speech about the alliance between Microsoft and Nokia during the 2011 Mobile World Congress, held in Barcelona, Spain, on Feb. 14, 2011. Credit: Toni Albir/EPA

Bottom photo: Stephen Elop, CEO of Nokia, speaks during an interview with the Associated Press at the Mobile World Congress in Barcelona, Spain, Monday, Feb. 14, 2011. Credit: Manu Fernandez/AP Photo

Nokia is set to pair its hardware with Microsoft's Windows Phone software in an effort to fend off the increasing success and competition from its rivals; Apple's iPhone, Google's Android operating system and Research In Motion's BlackBerry handsets.

The Finnish company made the widely expected decision official on Friday morning during a London news conference. 

"The entire smart phone market is growing rapidly, and we should be setting the pace," said Nokia Chief Executive Stephen Elop. "The game has changed. The game has changed from a battle of devices to a war of ecosystems."

In a Nokia internal memo leaked to the media Wednesday, Elop used much more dramatic language, writing that the company was "standing on a burning platform" with "more than one explosion -- we have multiple points of scorching heat that are fuelling a blazing fire around us."

Microsoft's Windows Phone software, currently in its seventh iteration, will replace Nokia's Symbian operating system on the majority of handsets from the company after the two firms complete a partnership agreement, Elop said.

Neither Nokia or Microsoft offered any specifics dates on when the agreement between the two tech giants would be finalized or when the first Nokia Windows Phone would hit retail, though Microsoft CEO Steve Ballmer said the process had begun.

"We're already working together to create the first Nokia Window's phones, and we've reached out to chip vendors, mobile operators and developers, and you'll hear more from us in all of those areas over the next weeks and months," Ballmer said.

The agreement will also give Microsoft access to Nokia's worldwide mapping and navigation services and access to large cellphone carriers in international markets that it hasn't had before, Elop and Ballmer said in a statement.

"In this partnership with Nokia, Microsoft brings its Windows Phone software and the brands mobile consumers want like Bing, Office and of course Xbox Live," Ballmer said Friday.

Nokia's mapping and navigation technology will be integrated into Microsoft's mapping services, such as maps used in the Bing search engine, and Microsoft's adCenter business will also sell and distribute ads across Nokia phones, the companies said.

Although Nokia is choosing Windows Phone 7 as its main strategy in smart phones, the company made clear that it is not planning to completely abandon its Symbian and under-development MeeGo operating systems.

Once the "long-term strategic alliance" is finalized, it will end up as a major departure from Nokia's past strategy in the smart-phone market, which had the home-grown Symbian at the core.

In January, Android dethroned Symbian as the world's most used smart-phone operating system -- a title Symbian had held since the inception of the market about a decade ago. Google's Android OS is comparatively young, having debuted in 2008.

Elop is fairly new to Nokia, having been hired as CEO last September from a senior executive position at Microsoft. He is also the first non-Finnish citizen to run Nokia, a company that is looking to him to turn around its large losses of market share in crucial markets such as the United States and Asia.

Nokia accounted for about 41% of the global mobile phone market in 2008, but that number fell to about 31% in 2010, according to the Associated Press. Despite the falling numbers, Nokia remains the world's top seller of mobile phones.

Below is a video of the Nokia news conference with Elop and Balmer.

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Photo: Nokia CEO Stephen Elop (left) and Microsoft CEO Steve Ballmer announce that Nokia will carry the Windows Phone as its main smart phone platform during a news conference Friday in London. Credit: Nokia / Getty Images

Video credit: NokiaConversations via YouTube

Struggling Finnish phone company Nokia may be putting the finishing touches on a deal with Microsoft that would put the Windows Phone 7 operating system on its handsets, according to reports Thursday.

Bloomberg, citing anonymous sources, said that Stephen Elop, Nokia’s new chief executive, has met with Microsoft Chief Executive Steve Ballmer about a marriage of convenience.

Both companies have been left in the dust as competitors such as Google Inc. and Apple Inc. gobble up the smartphone market.

Elop, who recently arrived at Nokia fresh from a stint heading up Microsoft’s business software division, is clearly looking to shake things up at the company that Apple co-founder Steve Wozniak derided as having an “image problem.”

This week, Elop sent an internal memo to employees, describing Nokia as stranded on a “burning platform,” according to Engadget. The company currently uses an operating system called Symbian and is also working on another platform with Intel Corp. called MeeGo.

Seems like Elop has until Friday to strike a deal -– that’s when he’s revealing Nokia’s new strategy to investors.

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Photo: Outside Nokia's offices in Helsinki, Finland. Credit: Henrik Kettunen/Bloomberg

Nokia may be abandoning its plans for a new smart-phone operating system, according to a reports based on a leaked memo from CEO Stephen Elop, who compared the phone maker's recent troubles to a man standing on a burning oil platform.

In the memo, first published Tuesday night by the Website Engadget, Elop tells employees of the Finland-based company that it is cutting back nearly all support for its planned MeeGo operating system.

"We thought MeeGo would be a platform for winning high-end smartphones," Elop wrote in the memo. "However, at this rate, by the end of 2011, we might have only one MeeGo product in the market."

The memo was reportedly posted on Nokia's internal website this week, and the Financial Times, Reuters and Engadget are reporting that "industry sources" have confirmed the memo's authenticity.

Nokia officials were unavailable for comment Wednesday morning.

In the memo, Elop writes that he has listened to shareholders, operators, developers, suppliers and his employees to get a grasp on how Nokia went from being a solid cellphone and smart-phone leader to "standing on a burning platform" with "more than one explosion -- we have multiple points of scorching heat that are fuelling a blazing fire around us."

Elop noted that "there is intense heat coming from our competitors, more rapidly than we ever expected. Apple disrupted the market by redefining the smartphone and attracting developers to a closed, but very powerful ecosystem."

The memo expressed amazement at Apple going from a 25% market share in the $300-and-up price range to a 61% share by 2010.

"They are enjoying a tremendous growth trajectory with a 78 percent earnings growth year over year in Q4 2010," the memo said of the Cupertino, Calif.-based tech giant. "Apple demonstrated that if designed well, consumers would buy a high-priced phone with a great experience and developers would build applications. They changed the game, and today, Apple owns the high-end range."

The memo then moved to addressing the threat posed by Google's Android.

"In about two years, Android created a platform that attracts application developers, service providers and hardware manufacturers," the memo said. "Android came in at the high-end, they are now winning the mid-range, and quickly they are going downstream to phones under €100. Google has become a gravitational force, drawing much of the industry's innovation to its core."

If Nokia does end up bailing on MeeGo, it may do so in favor of taking on other, more established operating systems for smart phones, such as Android or Microsoft's Windows Phone 7.

If that were the case, that move would position Nokia as more of a hardware maker, in a vein similar to Dell, Samsung, LG, HTC and Motorola, who each rely on Android, Windows Phone 7 or a combination of the two to power their smart phones and -- in some cases -- tablets.

Elop was hired as Nokia's chief executive from Microsoft last September. On Friday, he is scheduled to give a presentation on his strategy for Nokia going forward.

Nokia is the world's largest cellphone maker by volume, but recently Android dethroned Nokia's Symbian smart-phone operating system as the world's most used mobile OS.

Symbian had been seen as one of Nokia's most valuable and competitive assets -- a popular smart-phone operating system that has dominated that space from its inception until recently.

Google's Android has surpassed Nokia's Symbian as the top smart phone operating system worldwide.

The shift is a big one -- Symbian has been the leading smart phone operating system globally since the smart phone market launched about a decade ago, according to a report from Reuters.

Android's ascension is particularly notable because of how quick it has risen to the top of the smart phone software heap. Google's first Android operating system release was in October 2008.

According to the Reuters report, about 32.9 million handsets running Android were sold worldwide in the last three months of 2010, up nearly seven times more than the same period in 2009. Phones powered by Symbian accounted for 31 million handsets sold in the fourth quarter of last year, according to data from the research firm Canalys, the report said.

Sales of Apple's iPhone rose to 16.2 million units in the fourth quarter, up from 8.7 million a year earlier, according to Reuters.

A key difference between Google and its competitors such as Nokia, Apple and Research In Motion is the fact that Google doesn't make its handsets itself. As Reuters noted, Android has become the operating system of choice for HTC, LG Electronics, Motorola, Samsung and others.

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Photo: Customers look at Nokia Oyj E7 mobile handsets for sale in a Nokia store in Helsinki, Finland, on Wednesday, Jan. 26, 2011. Credit: Henrik Kettunen/Bloomberg

Nokia Corp. called off plans to launch its X7 smart phone in the U.S. because of a lack of support from AT&T Inc., sources told the Wall Street Journal.

The Finnish mobile phone company was supposed to offer the phone exclusively through the AT&T network starting next month, according to the report, which quoted people familiar with the situation.

But Nokia, which still plans to sell the X7 in other countries, sensed that AT&T wouldn’t back the U.S. launch with “enough marketing and subsidies support,” the people said.

That leaves Nokia in a bit of a jam. The company’s products are trailing competitors such as the Apple Inc. iPhone, the Research in Motion BlackBerry and Google Inc.'s Android devices.

Apple co-founder Steve Wozniak has said that Nokia has an “image problem.” Nokia, meanwhile, has filed lawsuits against Apple alleging that the tech giant has infringed on dozens of Nokia’s patents.

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Photo: Nokia X7. Credit: Ubergizmo

Nokia has expanded its patent fight with Apple to new fronts.

The mobile-phone maker announced Thursday that it had filed suit in the United Kingdom, Germany and the Netherlands against Apple, alleging that the technology giant has infringed Nokia patents with products sold in those countries, including the iPhone, iPad and iPod Touch.

According to a statement from Paul Melin, vice president of intellectual property at Nokia, the suits add 13 patents to the 24 Nokia already has accused Apple of violating in actions before the U.S. International Trade Commission and in Delaware and Wisconsin federal courts.

The new filings cover patents relating to touch user interface, on-device app stores and other device features.

Apple representatives were not immediately available for comment.

-- Abby Sewell

Apple co-founder Steve Wozniak took some shots at Nokia and opined about the Android and iPhone rivalry in The Hague this week, where he opens the Science & Technology Summit at the World Forum.

In an interview with the Dutch language De Telegraaf newspaper, spotted by the Engadget blog, Wozniak calls cellphone company Nokia a throwback from “a previous generation.”

Nokia, he said, came late to the touch screen game and now has “an image problem” that it needs to rectify with a fresh new brand and younger customer base.

Wozniak had sweeter words for Google’s Android phone, however, saying that the smartphone would likely edge out iPhone for market dominance.

Though Apple’s iPhone has “very few weaknesses” and is a leader in quality, he said, the Android has more features that appeal to a wider audience. Once Android works through its glitches, the operating system will surpass Apple’s, he said.

In a trip down memory lane, Wozniak also reminisced about an early Apple collaboration with a well-known Japanese consumer electronics company. Back in 2004, the companies had paired up to try to develop a groundbreaking phone, but the resulting product didn’t make the cut.

“Apple ... wanted something that could surprise the world,” Wozniak said. “Companies need to wait to capture a market until they have something extremely strong.”

Sounds like the iPhone, which was first released in 2007, fit the bill.

[Updated 12:14 p.m.: According to Engadget, Wozniak says he was misquoted by De Telegraaf. He says that he expects Android "to be a lot like Windows.... I'm not trying to put Android down, but I'm not suggesting it's better than iOS by any stretch of the imagination. But it can get greater market share and still be crappy."]

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Photo: Steve Wozniak speaks at the World Forum in The Hague on Thursday. Credit: Marcel Antonisse/AFP/Getty Images.