Microsoft (MSFT) gets a leg up in mobile

Nokia (NYSE: NOK) will start to load its handsets with Microsoft (NASDAQ: MSFT) applications including Live Hotmail, Messenger, Live Contacts and Live Spaces, according to (subscription required) The Wall Street Journal, the company will also allow some users to download the applications onto existing phones.

In a trial the will include eleven countries in Europe and the Middle East, Nokia is hoping to start to make money on software services to bolster the margins in its handset division. The company believes that the services will help increase consumer use of the internet to download music and use mapping features. This may well, in turn, open the market for advertising on cellphones.

Nokia has now stretched its lead as the world's No.1 handset company. It has about 36% of the global market, and believes it can get up to 40%. Motorola (NYSE: MOT) and Samsung each have about 15%. But, the average price of handsets is falling as more inexpensive models are sold in emerging markets, especially China. Offsetting this drop with services on the phones will be critical to Nokia's plan to keep it profits high.

Anyway, who wouldn't want to use a phone to find the closest pizza joint?

Douglas A. McIntyre is a partner at 24/7 Wall St.