Microsoft and Nokia yesterday signalled an easing of one of the technology industry's biggest enmities as they joined a rush by mobile communications and technology companies to cash in on a predicted boom in handsets that play music and other media.

The biggest US and European technology companies unveiled a ground-breaking partnership that will see Windows Media 10, the latest version of Microsoft's media-playing software, installed on Nokia handsets.

The deal, which allows songs to be transferred from a PC to a mobile phone, is a symbolic breakthrough in one of the tech world's thorniest relationships.

Nokia has long resisted using Microsoft's software on its handsets, since to do so would risk turning the mobile handset business into a mirror image of the PC business, where most of the profits go to Microsoft and chipmaker Intel.

Nokia has instead sought to keep its handsets as vertically integrated products, preventing the US software giant from replicating its dominance in PCs.

While it has yet to ship handsets that rely on the core Windows operating system, yesterday's announcement will give Microsoft a foothold on the European company's products.

The deal will also mean that users who download music on their Nokia handsets can listen to it on Microsoft's XP-based PCs. As part of the deal, Microsoft will support the Open Mobile Alliance standard on digital media rights.

The willingness of two fierce rivals to co-operate on digital music also highlights the latest rush by mobile companies to cash in on the promise of multimedia services such as music, video and gaming.

The lure of subscription services based on these technologies could help create the sort of business opportunities that prompted the rush to high-speed 3G networks, mobile industry executives meeting in Cannes for the industry's annual trade conference said. - (Financial Times Service)