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Microsoft sells Nokia’s feature phone business to FIH Mobile


Microsoft has sold Nokia’s feature phone business to FIH Mobile, a subsidiary of Foxconn, for $350 million, reports Engadget. The unit currently produces various low-end handsets like the 222 and 230 models.

As a part of the deal, Microsoft will hand over Nokia’s manufacturing plant in Hanoi, Vietnam. Nokia’s 4,500 employees will have the option to join Foxconn. Note that Microsoft’s phone business has been in a freefall, as the sales of its flagship Lumia phones were down by 73% this quarter compared to the same quarter last year.

The company had sold only 2.3 million devices this quarter, after having written off Nokia’s $7.5 billion phone hardware business in July last year.

Nokia brand to continue: Interestingly, the other Nokia also announced today a strategic agreement with HMD Global to create new Nokia branded mobile phones and tablets. The contract will enable HMD to produce Nokia branded feature phones, smartphones and tablets for the next 10 years. HMD mentioned that it would invest over $500 million over the next three years to develop the Nokia brand.

In April last year, Nokia had said that “it currently has no plans to manufacture or sell consumer handsets,” after Re/code reported that Nokia was planning to return to the consumer mobile market by the end of 2016. Subsequently in June the company said it would indeed return to the mobile phone business after its contract clause with Microsoft, which prevented it from using its brand name on handsets, would expire.

Microsoft Here stake: Last month, Microsoft was said to be in talks with carmaker Daimler AG to take a minority stake in its digital mapping service HERE. In December last year, Nokia said it had received all regulatory approvals for the sale of its Here mapping unit to the consortium of the German carmakers.

Financials: Microsoft reported a profit of $3.8 billion for the quarter ended March 31, 2016 (Q3 FY16), a 25% decline from $5 billion last year. The total revenues for the quarter stood at $20.5 billion, down 6% from $21.72 billion the corresponding quarter last year. The operating income of the company stood at $5.3 billion, a 20% decline from $6.6 billion last year.

Image source: Michael Kappel under CC BY-NC 2.0

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