Report : Microsoft Was Close To Acquiring Nokia But Talks Broke Down

Technology pundits have long speculated that, one day, Microsoft would buy its way into manufacturing of its own mobile phones. Apparently that day came a lot closer to fruition than people had thought.

Microsoft’s acquisition of Nokia’s mobile phone business – the deal you probably assumed would happen sooner or later – has been scuppered before talks were even made public, according to a new report.

On Wednesday, the Wall Street Journal wrote that Microsoft has been engaged in “advanced talks” to snap up the Finnish mobile maker, but that those discussions have recently broken down and are not likely to resume.

The WSJ also adds that both companies were close to an oral agreement with Microsoft purchasing the device division of Nokia, using some of Redmond’s reported $66 billion held in off-shore businesses. That method would have let Microsoft avoid a hefty tax penalty for purchasing the massive phone maker.

The price was reportedly too high in Microsoft’s reckoning and the software giant was understood to be concerned by Nokia’s inability to mount a serious challenge to the likes of Apple and Samsung in the smartphone business. This may sound a little rich coming from Microsoft, but the addition of HTC to the ranks of top class smartphone makers and the recent return to form of Sony and BlackBerry has made Nokia an outside bet in the smartphone race.

Nokia’s smartphones exclusively use Microsoft Windows Phone software, under a deal the two companies struck two years ago.

[Via]