The software giant and hardware maker recently held hush-hush talks in London about Redmond taking over the Fins mobile business, reports Wall Street Journal.
The duo, already mobile partners (Nokia was first to run Windows Phone) made “significant progress” toward a deal, but failed to come to an agreement over a pricetag.
The Journal also cited Nokia’s fading star in the smartphone wars as another bone of contention for Microsoft.
There is no prospects of the talks being revived, for now, a source said.
Microsoft and Nokia signed a $1bn sweetheart deal in 2011, which saw the Finnish giant bin its own Symbian mobile operating system for Windows Phone.
Analysts Canalyst is predicting massive growth for the new Windows Phone – set grow to 13% by 2017 and rival iPhone’s marketshare – thanks to Nokia and Chinese brands like Huawei.
“Nokia is the most active vendor in the Microsoft camp and it continues to make steady progress with its Lumia portfolio”..says Jessica Kwee, Canalys Analyst, noting some “major carrier wins” for the company in China and the US.
However, Nokia, once the mobile king, has since slipped back to No. 3, having failed to catch on to the smartphone trend as quick as Apple and Samsung, the “two horses” in that race.