Microsoft was in talks to boost its position in the mobile phone market by buying the devices business from Nokia but failed to seal a deal, the Wall Street Journal reported Wednesday.
The Journal cited unnamed sources as saying the US technology titan and the pioneering Finnish mobile phone company were involved in serious talks that recently faltered.
Microsoft has been striving to gain ground in a global smartphone market dominated by handsets powered by Google-backed Android and Apple iOS operating systems.
Nokia has seen its past glory fade under pressure of competition from Apple and Asian mobile phone makers.
Microsoft and Nokia joined forces about two years ago in an alliance aimed at making inroads with handsets powered by Windows Phone software.
Windows, boosted by the Windows Phone 8 introduced last year, boosted its US market share to 5.6 percent from 3.8 percent, according to a recent Kantar Worldpanel ComTech survey.