Microsoft reportedly was in talks to buy Nokia's device unit, but talks broke down.
According to the Wall Street Journal, the move, which isn't all that surprising given the companies' tight partnership on Windows Phone, is the second report indicating that Nokia may be on the block. in buying Nokia.
The plan was to combine Microsoft with a device maker with scale and then go after the likes of Apple and Samsung. In theory Nokia would give Microsoft the scale to crank out Windows-based tablets as well phones. What's unclear is whether actually owning Nokia would provide any real benefit to Microsoft's market share.
It's also notable that the Journal story noted that Microsoft walked away due to Nokia's placement in the smartphone pecking order. That reality could indicate that Microsoft thinks it needs a new horse to make a dent in the mobile market. Samsung is closely aligned with Google's Android.
Microsoft is in a battle with BlackBerry to be the No. 3 smartphone platform. Windows Phone is ahead for now, but BlackBerry's Q10 appears to be selling well. In either case, Microsoft and BlackBerry are vying to be a distant third to Apple and Samsung.