Nokia's Problems Haunt Microsoft

Nokia warned that its cellphone business is quickly deteriorating and that it will cut 10,000 workers, a setback that threatens partner Microsoft mobile aspirations.

The companies bound themselves together last year in a last-ditch effort to compete in a smartphone market dominated by Apple and Google. Now, Microsoft faces the possibility that the company responsible for two-thirds of its mobile software shipments may not be strong enough to give it influence in mobile computing. Microsoft, which made its own big bet by choosing Nokia to build its flagship Windows Phone devices, is responding by increasing its aid for the handset maker. But if Nokia continues to struggle, the software giant may have to start searching for other options.