Microsoft was in talks to buy Nokia's handset biz

Although both Microsoft and Nokia have attempted to quash rumours of a takeover since the installation of ex-Microsoft man Stephen Elop as Nokia’s CEO, rumours have emerged that Redmond recently held late-stage talks to dicuss buying the Finnish company’s handset business.

Nokia’s Windows Phones have largely been met with positive reviews, though a lagging app ecosystem and major inroads by Android devices have hampered success. In part thanks to this, Microsoft has been rumoured to be in serious discussion with Nokia to pick up the handset business. However, the Wall Street Journal reports, these talks wound down due to Nokia’s market position and disagreements on pricing.

Some of the talks are rumoured to have taken place as recently as this month, but the WSJ’s insiders have said they are not likely to advance further – at least any time soon.

The price, then, may have simply been too high. Nokia’s handset unit is valued on Wall Street at over $14 billion and made up almost half of the company’s revenue last year.

Although Stephen Elop’s position at Nokia, as well as Nokia’s commitment to Windows devices, post-Symbian, prompted rumour after rumour about a takeover, it is far more likely that the current arrangement suits Redmond better. Elop, loyal in the long-term to Microsoft, is steering Nokia and it is less risky to influence a device unit by proxy rather than outright taking full responsibility.

The company insists that it is still a player – and indeed, its devices have been significantly better since Symbian was ditched. But for now, other phone makers have taken up the fight against Apple with significantly more success than Nokia, specifically by utilising Android. Nokia’s allegiance to Microsoft puts it in a unique market position as an alternative to the iOS and Android mainstream, but ultimately it begs the question: if Nokia had taken up Android, could it have seriously turned around its operations, or ended up as another also-ran?