Nokia in Cell-Phone Talks with Microsoft and Google

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When Nokia's (NOK) CEO presents the company's strategy to investors in London on Friday, it could announce plans to use an outside operating system -- namely, Microsoft's (MSFT), Google's (GOOG) or both, The Wall Street Journal reported Thursday.

In a memo to employees, Nokia CEO Stephen Elop, a former Microsoft executive, wrote that Nokia's software platform is "burning," and that a "huge effort" will be required to turn the Finland-based company around, the Journal reported. Nokia currently uses its own Symbian software system.

The company is facing heightened competition in both the higher- and lower-end mobile-phone market. Smartphones, such as Apple's (APPL) iPhone and competing phones using Google's Android platform, have pulled sales away from Nokia's more expensive products. Meanwhile, Asian manufacturers are undercutting Nokia on the lower end of the market.

In January, Nokia posted fourth-quarter earnings that fell 21% from a year earlier, while its market share fell four percentage points to 31%.

Meanwhile, recent tweets by Google employees indicate that Nokia is more likely to reach a deal with Microsoft for its Windows platform than with Google, according to separate reports by The Seattle Times and Fortune.

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