Cell phone maker Nokia Corp. will start to use Microsoft Corp.’s copy protection software to boost the use of wireless entertainment such as music and videos, the two companies said today.

Microsoft’s technology allows users of Nokia cell phones to share protected pieces of content — such as music, games or videos — between phones, PCs and other devices.

Nokia, the world’s largest cell phone maker, will license Microsoft’s PlayReady digital rights management (DRM) technology and build it into its S60 software, the most widely used software platform in the cell phone industry.

Nokia’s S60 software, built on Symbian’s operating system, is used extensively in Nokia’s lineup as well as in advanced cell phones from LG Electronics and Samsung Electronics.

Its closest rival is Microsoft’s own Windows Mobile, but analysts said the deal should benefit both.

“It is in both [companies'] interest that there is compatibility between the two and content can flow between devices,” said Geoff Blaber, a senior analyst at consultancy CCS Insight.

In 2005, the two companies — fierce competitors in the mobile software industry — raised some eyebrows when they signed their first cooperation agreement to put Windows Media player onto Nokia phones.

As cell phone prices fall, handset vendors are looking for new revenue from potentially lucrative software operations; meanwhile Microsoft is looking for new revenue from the mobile market.

In June, Nokia said it would reshape its whole organization to better focus on software and services.

Nokia said it expects many S60 and its lower-tier Series 40 phones, which are also included in the deal, using PlayReady technology to hit the market in 2008.

“This takes it to a huge portfolio of Nokia devices,” CCS’s Blaber said. “The deal makes perfect sense for Nokia. There isn’t so comprehensive a DRM solution available for the mobile space.”

$20B industry

The companies said they expect the deal to widen the entertainment offerings on cell phones.

Entertainment services — games, music, TV, adult content and gambling — will grow to $38 billion by 2011, from around $18.8 billion in 2006, according to research firm Informa PLC.

Music has been the main driver for mobile entertainment so far, but the breakthrough of mobile television broadcasts is expected to give the market a new boost.

“This is a new thing and developing at a rapid clip. Can it get better and move to the mainstream? Absolutely. Nokia and Microsoft, being large influential companies, are trying to push the ball forward,” said Chadd Knowlton, general manager for content access and protection at Microsoft.

“Mobile television, that’s going to be much more mainstream than today’s entertainment features,” he added.

Microsoft and Nokia said they would also work together to enhance and simplify consumer access to digital content using mobile devices.

“This partnership will enable a very broad range of content to be available for consumers,” said Sebastian Nystrom, a director in Nokia’s technology unit.

Nokia is widely expected to launch an online music and mobile content store, a rival to Apple Inc.’s iTunes, in coming months, using technology gained from last year’s acquisition of U.S. digital music distributor Loudeye.

Nystrom declined to comment on the possible impact the Microsoft deal could have on services built on the Loudeye acquisition, but said, “Overall, PlayReady will be the key component in offering such services to consumers.”