Microsoft had talks about buying Nokia

Microsoft has talked about purchasing Nokia, although the deal faltered over price, and the Finnish firm's current position in the mobile market.

The discussion took place a month ago, but nothing was agreed and talks are unlikely to be resumed, sources told the Wall Street Journal.

Nokia's handset unit is currently worth $14 billion, a far-cry from the $247 billion market cap it had back in 2000 when it was the dominant mobile phone manufacturer.

Microsoft is rumoured to have been eyeing up Nokia since late 2010 when its former Redmond executive Stephen Elop jumped ship to become the CEO of the Finnish firm. His first move was to kill the MeeGo platform and sign Nokia up to use Windows Phone as its primary operating system.

Since then both firms have been working closely together to increase market share, so it remains unclear what advantages Microsoft would have by purchasing Nokia.

Carolina Milanesi, consumer devices analyst at Gartner dismissed notions that Microsoft simply wants the patents Nokia holds.

"Nokia's biggest assets in patents are around connectivity not UI or software + many are under FRAND or cross licensing deals," Milanesi tweeted.

"Nokia is already a committed partner for Microsoft so why buy it? [The] only reason I can think of: taking it off the table for anyone else to get."

History suggests that such tie-ups have not worked well. Sony merged with Ericsson in 2001 and the two companies had a fragmented relationship, which ended in Sony buying out its partner in 2011 for $1.47 billion.

HP infamously tried to break into the smartphone market by acquiring Palm for a colossal $1.2 billion in 2010. This ended in tragedy for Palm fans and employees with former HP CEO Leo Apotheker deciding to axe the HP Pre and HP TouchPad devices just weeks after they were launched. This effectively killed the webOS platform, which has since been sold to LG.

As expected, talk of a buyout has been dismissed by both companies.

"We have a deep partnership with Microsoft, and it is not uncommon for Nokia and Microsoft to meet on a regular basis," a Nokia spokeswoman said.

Microsoft has declined to comment.

Despite investing heavily in the Windows Phone platform, the operating system has just 3 per cent of the market, according to figures from Gartner. Android dominates the landscape with 75 per cent market share, followed by iOS with 18 per cent.