Well, this is both a surprise and it isn't. Nokia made the move today many expected them to - but they went further than predicted.

After CEO Stephen Elop told the whole of Nokia they were 'standing on a burning platform' earlier this week in a wacky memo, it was clear something radical was on the horizon. Most predictions centred on Nokia making a deal with Microsoft to produce smartphones running Windows Phone 7. And, well, yep, that happened.

But there seems to be more to the deal than Nokia just becoming another WP7 licensee. They're talking about a 'strategic partnership.' Nokia products like Ovi Maps are going to be incorporated into WP7 as Bing services, and Nokia are talking about using their expertise in simpler phones to help Microsoft break into that market.

What's more, Elop was fairly blunt about the fact that as far as smartphones go, WP7 isn't just one of the options Nokia will be supporting - it's the only game in town. Development on MeeGo, the company's intended smartphone software platform, is being all but stopped, and the head of the project is leaving.

All in all, it sounds almost more like a Sony Ericsson-style joint venture than a mere licensing arrangement. For all intents and purposes, Nokia's days as a software maker are at an end - it'll churn out devices using Symbian (which is technically owned by an open-source foundation) in cheaper markets and focus on WP7 in higher-end markets.

Is it the right thing to do? Despite the squealing of some Nokia fans, probably. It's certainly good news for Microsoft, who badly needed a major, exclusive hardware partner to push Windows Phone 7 into the marketplace. Could it lead to even deeper integration between the two companies, or even a merger? We wouldn't rule it out. Nokia's platform may still be burning, but it seems to have leapt into warm waters.

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