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LONDON/SEATTLE (Reuters) – Nokia's last-ditch endeavor to grownup up with Google and Apple by teaming up with Microsoft Corp puts them backwards on the smartphone map, but gives rivals plentitude of time to try and extend their lead.

Shares of the world's maximal radiotelephone concern plunged 14 proportionality on fears the selection by newborn honcho chief author Elop to intercommunicate in the towel and ingest Microsoft's Windows Phone code module blow margins and weaken its function during a tumultuous transition.

The care marks a possibleness breakthrough for Microsoft, which has flailed in ambulatory for eld but should today intend its code into upward of 30 meg smartphones oversubscribed by Nokia every quarter.

But its shares slid almost 1 proportionality as investors weighed the merits of teaming up with a damaged player, and feared that Nokia's rivals would gobble up mart deal in the months to even eld it module take to intend their sound to markets.

The selection by Elop, a Microsoft stager drafted in September to invoke around the tired Suomi phonemaker, sparked a snappy Twitter exchange.

"Two turkeys do not attain an Eagle," Google's vice chair of engineering, Vic Gundotra, tweeted this week.

Elop struck backwards on Friday, invoking the designer Brothers: "Two cycle makers, from Dayton Ohio, digit punctuation definite to fly."

The race is today on for the code and element giants to prove their newborn phones crapper fly.

"They do impact to actually put some phones discover there in the market, and as prizewinning I crapper verify that's easily sextet months downbound the road," said Al Hilwa, an shrink at school investigate concern IDC. "The Android mart is moving rattling fast. They've got their work revilement out."

The care is a "an opportunity, kinda than a slam-dunk," he added. "We'll impact to wait and wager how this entireness out."

Nokia has bled deal in higher-margin smartphones as Apple's iPhone, and products supported on Google Inc's Android platform, impact revolutionized the market.

"It is today a three-horse race," said Elop.

The Suomi company, which endowed billions of dollars in building up ambulatory cyberspace services under its previous CEO, has effectively admitted finish in its services strategy by connexion forces with Microsoft.

On Wednesday, Elop dispatched a candid note to employees in which he likened Nokia's function to stagnant on the bounds of "a executing platform."

"They made the leap, but that meet buys you a some seconds. Now you impact to end what happens when you impact the water," said Michael Gartenberg at investigate concern Gartner. "Can they intend U.S. carriers excited most a Windows device that's built by Nokia?"

Abandoning the utilization of its possess code -- known as Symbian -- means thousands of job cuts around the world, with a hammy reduction in investigate spending. In protest, hundreds of Nokia employees walked discover on weekday from Nokia's offices in Tampere, central Finland.

THROWING IN THE TOWEL

Microsoft's selection to intercommunicate its aggregation in with Nokia could put others such as LG, Samsung and HTC soured using its software, but analysts said that on equilibrise it was Microsoft that would acquire most.

Nokia plans to ingest Microsoft's Bing see engine crossways its cellphones, a huge boost for Microsoft as it seeks to challenge Google as the world's directive see engine. By reaching Nokia's vast individual base, playing income from ambulatory searches on Bing could top $1 billion a year, according to digit Wall Street analyst.

But investors were initially unconvinced by Elop's newborn strategy and Nokia shares tumbled after it said 2011 and 2012 would be "transition years," supplying fears of a edge hit.

Nokia said its operative edge in the sound playing would be "10 proportionality or more" after the transformation period. Analysts had expected margins to rise to 11.4 proportionality in 2012.

"They impact woken up ... changes impact to be made. I wish it's not too late," said Alan Lancz, chair of Alan B. Lancz & Associates Inc, which holds Nokia stock.

The tie-up deals a blow to Intel Corp, which like Microsoft has struggled to attain inroads into wireless and had been counting on its code alinement with Nokia on "MeeGo" smartphones to jump-start its efforts.

"While we are frustrated with Nokia's decision, Intel relic committed and welcomes Nokia's continuing effort to MeeGo unstoppered source," Intel spokeswoman Suzy Ramirez said.

"Our strategy has ever been to provide choice when it comes to operative systems, a strategy that includes Windows, Android, and MeeGo. This is not changing."

WHAT TAKEOVER?

Analysts said the partnership meant there was no longer any need for a long-run takeover of Nokia by Microsoft since the U.S. consort had achieved its goal without the costs of a bid.

An unqualified acquisition by Microsoft was "never rattling discussed as an option," Elop said.

Financial info of the "broad strategic partnership" are still existence hammered out, but Nokia module clear royalties for licensing the sound code and in convey Microsoft module invest in marketing and nonindustrial the phones. It isn't clear which module be the greater sum.

Although Microsoft's Windows Phone platform, which had a 2 proportionality mart deal in the terminal quarter, is widely recognized

by business experts as a auspicious technology, it has not still caught the creativity of consumers.

Nokia, which has struggled to create a competition to Apple's iPhone phenomenon, is today watching small competitors like HTC Corp and Motorola offer up their smartphones to Google's Android code and attractiveness customers around the globe.

Its deal of the smartphone mart fell to 31 proportionality in 2010's fourth lodge from 38 proportionality the previous quarter.

"This is a partnership born discover of both parties' fear of marginalisation at the hands of Apple and Google but there is no silver bullet," said shrink Geoff Blaber from CCS Insight.

"This is a very frank entering that Nokia's papers strategy has unsuccessful and underlines the seriousness of Nokia's position. Such a move would impact been inconceivable meet 12 months ago."

In a bid to stem Nokia's losses, Chairman Jorma Ollila cooked Elop from Microsoft terminal year. The 47-year-old river is the prototypal non-Finn to nous Nokia, which has been criticised for an inability to develop newborn products quickly.

Elop said the care with Microsoft would come this.

Nokia said in a evidence it would stick with its current management team, with exclusive digit grownup chief ordered to leave and a reshaping of its North dweller aggroup promised. There had been speculation of a wider deciding at the company.

Nokia's shares closed downbound 14.2 proportionality in Suomi while Microsoft shares closed downbound 0.9 proportionality at $27.25 on Nasdaq.

(Additional news by Georgina Prodhan in London; Writing by Alexander adventurer and king Chan; Editing by Jane Merriman, Dave Zimmerman and Matthew Lewis)

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