Nokia and Intel merge high-end software

BARCELONA (Reuters) - Nokia and Intel are to merge their top-end smartphone operating systems as they face increasing competition from cellphone industry newcomers Google and Apple.

Nokia, the world's biggest maker of mobile handsets, will merge its Linux Maemo software platform, used in its flagship N900 phone, with Intel's Moblin, which is also based on Linux open-sourced software.

"This makes a good challenger to (Google's) Android (operating system), allowing the platform to go across devices and making it much more appealing for developers," said Gartner analyst Carolina Milanesi.

The cellphone industry has started to focus increasingly on services and software after Apple and Google entered the market, helping to boost sales of the top-end phones.

Nokia rolled out its first Maemo phone -- the result of a five-year development project -- only three months ago, with analysts seeing Maemo boosting the firm's chances of succeeding in the higher end of the market.

The software deal announced on Monday is also set to boost Intel's chances of getting its chips into the cellphones of the Finnish company, which controls around 40 percent of the global phone market.

"We believe the partnership ... will result in significant sales volumes for Intel," said CCS Insight analyst John Jackson.

The new software platform, called Meego, will be hosted by The Linux Foundation www.linuxfoundation.org/ the companies said.

Nokia's shares were up 1 percent at 9.55 euros at 7:11 a.m. EST, when the DJ Stoxx European technology sector index was up 0.1 pct.

(Reporting by Tarmo Virki; Editing by Greg Mahlich)