Nokia currently offers mapping and navigation tools for its phones under its Ovi brand; with the new partnership, Yahoo Maps will now be "powered by Ovi." In exchange, Yahoo will become the exclusive provider for Nokia's Ovi Mail and Ovi Chat services, which will be branded with a "powered by Yahoo" message.
In the login space, Nokia and Yahoo are working to make Ovi user IDs usable across select Yahoo properties. We presume these will include maps, e-mail and chat, although it isn't clear if the Ovi login will extend to other Yahoo services like Flickr.
Strategically, this makes a lot of sense. Although Nokia is the largest mobile device maker in the world, its marketshare -- especially in next-generation smartphones -- lags behind companies like Google, Apple and RIM. Likewise, while Yahoo still has a significant share of the online mail market, its services are in decline and its search deal with Microsoft won't be complete on a global scale until 2012.
Since Nokia already has strong investments in mapping and navigation, and Yahoo has a handle on chat and e-mail, it makes sense for the two companies to partner together instead of trying to build out their own services.
What do you think of this arrangement?