Microsoft selling feature phone business to FIH Mobile (Foxconn) and HMD (in Finland)

Although not directly relevant to AAS or AAWP, this is certainly of tangential interest. Microsoft acquired the Nokia feature phone (i.e. extreme low end, below Symbian) business when it bought Nokia's Devices division, but it never really wanted it (no matter what it said at the time). It seems that now is the right time to sell it off this part of the company, in a complex deal, to a subsidiary of Foxconn, one of the largest OEMs in the world, along with a new company, HMD, based in Finland. The latter is partly made up of ex-Nokia staff and will provide the management and design, while Foxconn/FIH will provide the manufacturing and testing facilities. The Nokia-branded feature phones still sell in decent numbers, mainly to developing markets which either can't afford smartphones or don't have the infrastructure to make the most of them.

From the press release:

Microsoft Corp. on Wednesday announced it reached an agreement to sell the company’s entry-level feature phone assets to FIH Mobile Ltd., a subsidiary of Hon Hai/Foxconn Technology Group, and HMD Global, Oy for $350 million. As part of the deal, FIH Mobile Ltd. will also acquire Microsoft Mobile Vietnam — the company’s Hanoi, Vietnam, manufacturing facility. Upon close of this deal, approximately 4,500 employees will transfer to, or have the opportunity to join, FIH Mobile Ltd. or HMD Global, Oy, subject to compliance with local law.

Microsoft will continue to develop Windows 10 Mobile and support Lumia phones such as the Lumia 650, Lumia 950 and Lumia 950 XL, and phones from OEM partners like Acer, Alcatel, HP, Trinity and VAIO.

As part of the deal, Microsoft will transfer substantially all of its feature phone assets, including brands, software and services, care network and other assets, customer contracts, and critical supply agreements, subject to compliance with local law. The transaction is expected to close in the second half of 2016, subject to regulatory approvals and other closing conditions.

FIH contact

As the release states, none of this has any impact on Microsoft's commitment to Windows 10 Mobile and its Lumia line - if anything, it's one less distraction for the company on the mobile front.

PS. Before ill-informed commentators leap in, the sold-off handsets and division are the Series 40/S40/Asha (etc.) line and nothing whatsoever to do with Symbian. If I hear one more American podcaster mention "Symbian feature phones" I think I'll scream!

PPS. There's also a press release up on Nokia's site, including:

Nokia has announced plans that will see the Nokia brand return to the mobile phone and tablet markets on a global basis. Under a strategic agreement covering branding rights and intellectual property licensing, Nokia Technologies will grant HMD global Oy (HMD), a newly founded company based in Finland, an exclusive global license to create Nokia-branded mobile phones and tablets for the next ten years. Under the agreement, Nokia Technologies will receive royalty payments from HMD for sales of Nokia-branded mobile products, covering both brand and intellectual property rights.

HMD has been founded to provide a focused, independent home for a full range of Nokia-branded feature phones, smartphones and tablets. To complete its portfolio of Nokia branding rights, HMD announced today that it has conditionally agreed to acquire from Microsoft the rights to use the Nokia brand on feature phones, and certain related design rights. The Microsoft transaction is expected to close in H2 2016. Together these agreements would make HMD the sole global licensee for all types of Nokia-branded mobile phones and tablets. HMD intends to invest over USD 500 million over the next three years to support the global marketing of Nokia-branded mobile phones and tablets, funded via its investors and profits from the acquired feature phone business.

So again, nothing to do with AAS or AAWP, but worth noting that at some point in the next year the brand 'Nokia' will be back on smartphones, but under new ownership and almost certainly running some flavour of Android.

Published by Steve Litchfield at 10:50 UTC, May 18th

Section: Flow
Categories: Industry
Platforms: General, General