Intel has signed a partnership with Nokia, the mobile phone market leader, that could give the world's biggest chip maker the breakthrough it has been looking for into the mobile market.

Under the agreement, Intel will buy intellectual property from Nokia related to high-speed wireless technology and the companies also said they plan to collaborate on open-source mobile Linux software projects.

They did not give a specific timeline for the development of products but said they expect "many innovations to result from this collaboration over time."

The companies said they aimed to define "a new mobile platform beyond today's smartphones, notebooks and netbooks" for hardware, software and mobile internet services.

Intel already sells chips for netbooks, a type of no-frills laptop computer, and Nokia has said it would look into the possibly of expanding beyond phones to develop netbooks. The pact may also help Nokia compete with rivals such as iPhone from Apple and BlackBerry from Research In Motion, as well as Pre from Palm.

"This Intel and Nokia collaboration unites and focuses many of the brightest computing and communications minds in the world, and will ultimately deliver open and standards-based technologies, which history shows drive rapid innovation, adoption and consumer choice," said Anand Chandrasekher, Intel senior vice president and general manager, Ultra Mobility Group.

"With the convergence of the internet and mobility as the team's only barrier, I can only imagine the innovation that will come out of our unique relationship with Nokia. The possibilities are endless."

Intel dominates the microchips market for PCs but its high-powered chips drain too much battery for use in the mobile market. Nokia has more than 1 billion mobile phones in use around the world but has failed to break into the US market in a big way.

In a conference call with reporters, neither company would be drawn on what any future products would look like.

The alliance could spell stiffer competition for UK-based ARM Holdings, which is one of the biggest suppliers of chip designs in the cell phone marketplace, including the majority of leading smartphones by Apple and RIM.

Analysts said the deal gives Intel a chance to take on leading mobile phone chip makers Qualcomm, the market leader in mobile phone chips, and Texas Instruments, a big Nokia supplier.

"Intel at least has its foot in the door. It's an important and strategic customer," said Gartner analyst Jon Erensen, who sees the partnership as a way for Intel to get into the market for advanced phones known as smartphones. "You're probably talking about something like 2011 before you get down to the power consumption and integration you'd need for that kind of device," he said.

Nokia's US shares were up 32 cents, or 2 per cent, at $14.40 in afternoon trading on the New York Stock Exchange. Intel shares were up 12 cents, or 0.8 per cent, at $15.80 on Nasdaq.

"You're not going to see a big response on it yet because they didn't give any colour in terms of timing or the particulars," said Patrick Wang, vice president at brokerage Wedbush Morgan. "Longer term, this is going to be an important partnership although... we still have to see the companies execute and the products they introduce have to gain traction in the marketplace."

Times Recommends

• Minister in talks with Saudis to protect creditors
• Premier Inn hits back in £29-a-room row
• Bankers hit back at 'populist' bonus supertax