The world's largest cell phone manufacturer needed to collaborate with Intel in order to keep its options open.

On Tuesday, the two companies announced a long-term partnership to develop smartphones and other devices that will run on Intel's microprocessors.

Nokia is the global leader by far in cell phones and smartphones shipped, but it's facing some issues as the mobile market is set to decline for 2009. Rivals such as Apple's iPhone, Research In Motion's BlackBerry, and Google's Android are quickly carving out market share at the top of the market, as well as creating strong ecosystems for developers.

The Intel collaboration potentially gives Nokia a new architecture to play with that could lead to a host of mobile Internet-connected devices, said Gartner lead analyst Leslie Fiering. Future chipsets could help the handset maker recapture the bulk of the high-end smartphone market, as well as give it the flexibility to develop devices with new form factors and capabilities.

"It's a killer world out there and anyone who's not looking ahead is going to die," said Fiering. "I don't think there's any one driver or competitor out there that led to this. To quote [former Intel CEO] Andrew Grove, 'Only the paranoid survive.' "

Nokia and Intel remained tight-lipped on what type of products could come from this collaboration, but the companies indicated they are interested in capitalizing on the convergence of the mobile phone and PC experiences. Nokia has already said it's mulling entering the laptop business, and the Intel deal could provide it with the right hardware.

"We will explore new ideas in designs, materials, and displays that will go far beyond devices and services on the market today," said Kai Oistamo, executive VP of device for Nokia, in a statement. "This collaboration will be compelling not only for our companies, but also for our industries, our partners and, of course, for consumers."

The companies also said they would be collaborating on open source software initiatives involving the Moblin and Maemo platforms. One potential outcome is that these Linux-based operating systems could be combined for Nokia's mobile Internet devices and netbooks, and the company could still use Symbian for its smartphones.

Fiering said she doesn't expect much to come out of the software collaboration, though, and the move may just give the companies more sway with the standards bodies.

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