Published in Mobiles

Microsoft sells Nokia to Foxconn

by on18 May 2016

Pretty much as we predicted

Microsoft has confirmed that it is selling its featurephone business to manufacturing company Foxconn for $350 million.

This will give Foxconn's FIH Mobile the right to use the Nokia brand and 4,500 employees who will switch payrolls. The official Microsoft press release says it expects the deal to close in the second half of 2016.

The featurephone business is pretty much dead in the water in the west. They are low-end mobile phone that doesn't have the capabilities of a smartphone and are often used as cheaper burners.

Microsoft has been scaling back its production of featurephones. A leaked memo from 2014 showed that the company was going to focus on Windows Phones instead of Nokia products. And now Microsoft has moved away from Windows Phones too.

Microsoft's 2013's acquisition of Finnish phone manufacturer Nokia was a complete disaster. Redmond took a $7.6 billion writedown from the deal which was more than the $7.2 billion it paid for the former rubber boot maker.

The deal with Foxconn leaves Nokia open to return to making phones. It released a statement at the same time as the Microsoft deal announcing a new 10-year deal with a company to produce branded Nokia phones. The new company, HMD, has bought back the rights to the Nokia brand from Microsoft and will use that on its products.

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