Microsoft recently abandoned talks with Nokia about buying the Finnish company’s handset division, according to Wall Street Journal sources.

The discussions reportedly took place as recently as this month but failed to develop into anything due to concerns about price and Nokia’s declining position in the market. The discussions are unlikely to be revived, the sources added.

Nokia is valued at more than $14 billion on the US stock market and the company’s phone unit contributed nearly half of its $40.15 billion in revenue in 2012.

A Nokia spokeswoman told the Wall Street Journal: “We have a deep partnership with Microsoft, and it is not uncommon for Nokia and Microsoft to meet on a regular basis.”

Microsoft declined to comment.

Led by former Microsoft executive Stephen Elop, Nokia committed to Microsoft’s Windows Phone platform for its smartphones in a deal announced in February 2011. The agreement also included Microsoft providing billions of dollars to help Nokia’s marketing and engineering efforts.

Nokia has released a number of Windows Phone devices under the Lumia brand, with limited success. The company’s first quarter results for 2013 saw smartphone sales fall 32 per cent year-on-year to €1.16 billion. There was a 49 per cent drop in the number of smartphones shipped — 6.1 million units, 5.6 million of which were Lumia devices.

However, Nokia accounted for 79 per cent of all Windows Phone devices sold during the first quarter of 2013, according to IDC.

Despite Nokia’s support, Windows Phone has struggled to gain traction. It has overtaken BlackBerry to become the third-largest selling mobile OS but has struggled to make progress against iOS and Android.

The Microsoft OS had market share of around 3 per cent in the first quarter of 2013, according to research firm IDC, compared to Android’s 75 per cent.

Nokia is the only handset vendor to follow a Windows Phone-only smartphone strategy, while other major handset vendors, such as Samsung and HTC, treat Windows Phone as a sideline to Android.