Yes, this is a rumor, and by golly it strains the limits of credulity, but take note of its source. Firstly, the details: according to Eldar Murtazin, Microsoft and Nokia will enter talks next week to discuss the potential for the American software giant to purchase the Finnish company's mobile arm, meaning the part that makes all those delectable smartphones. Eldar's not been able to dig up any further intel, but expects a deal could be closed as early as the end of this year. We're inclined to believe there's at least some semblance of truth to Eldar's words because of his track record. Way back in December of last year, when nobody believed Nokia would deviate from its Symbian strategy, Eldar reported the similarly incredible-sounding news that Microsoft and Nokia were in discussions about the latter using Windows Phone as its main smartphone OS. That turned into reality this February, and more recently, the Russian mobile spy managed to also accurately predict Nokia killing off the Ovi brand in favor of an eponymous naming scheme for its services. And that's all on top of Eldar's knack for obtaining Nokia prototypes way ahead of release.
So, assuming for a moment that Microsoft does indeed have its eyes set on turning Nokia's handset business into its own mobile hardware division, what would it all mean? Well, we can only see this making sense for Espoo if underwritten by a humongous check from Microsoft, but that might not be a problem. The Redmond camp has recently shown its determination to get what it wants by spending $8.5 billion on Skype, and previously offered north of $44 billion for Yahoo, a good deal more than Nokia's total market cap of around $32 billion. Let's not forget, Nokia once used to manufacture galoshes and tires, so it already has a history of transformative change. And hey, having an ex-Microsoft guy at the top means that if this kind of move were to ever happen, now might just be the right time for it.
Update: As Reonhato pointed out in comments, Mark Squires, UK Communications Director for Nokia, has already issued an uncharacteristically pointed non-comment. "We typically don't comment on rumors. But we have to say that Eldar's rumors are getting obviously less accurate with every passing moment."