Microsoft Explored Handset Deal With Nokia

Microsoft Corp. recently held advanced talks with Nokia Corp. about buying its handset business, people familiar with the matter said, as the laggards in the fast-moving mobile market struggle to gain ground.

The discussions faltered over price and worries about Nokia’s slumping market position, among other issues, these sources said. One source said talks took place as recently as this month, but aren’t likely to be revived.

“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. A spokeswoman for Microsoft declined to comment.

It isn’t clear how much money Nokia wanted for its handset unit. Nokia’s U.S. stock-market value is more than $14 billion, and the company generated nearly half of its $40.15 billion, in revenue last year from its mobile-phone segment.Hardware and software suppliers, retailers, television networks and many other companies increasingly see smartphones, tablets and other mobile devices as fundamental to their futures.

Consumers are spending more of their time glued to their phones—watching videos, shopping, keeping tabs on their friends and staying on top of work—than on the personal computers once at the center of the tech sector.

The mobile revolution has minted winners like Apple Inc. and Samsung Electronics Co., while other players have failed to adapt quickly enough to market changes. The latter category includes Microsoft, the PC software pioneer, and Nokia, a leader in early cellphones, that has fallen behind since Apple’s 2007 introduction of the iPhone made smartphones a staple for many consumers.

Nokia’s dilemma was summed up dramatically more than two years ago by Stephen Elop, the former senior Microsoft executive who became Nokia’s chief executive. In a widely quoted internal memo, Elop compared Nokia to a man working on a burning oil platform in the middle of the North Sea. The man’s unpalatable options were to risk death on the “burning platform,” or take a risky plunge into the freezing water for a shot at saving himself…

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