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Microsoft to offload feature phone business in £240m deal

James Pearce
May 18, 2016

Foxconn subsidiary FIH Mobile has agreed to buy the assets as part of a deal with HMD Global, which could see return of Nokia to feature phone market

Microsoft has agreed a deal to sell its feature phone division to Foxconn subsidiary FIH Mobile and HMD Global for just $350 million (£240 million).

The deal, which was announced by the US manufacturer today (May 18) will also see Microsoft Mobile Vietnam division transferred to FIH.

It will see all assets related to feature phones, including brands, software and services, care network and other assets, customer contracts, and critical supply agreements, transferred over to FIH and Finnish firm HMD.

The 4,000 staff currently employed in the division by Microsoft will also be given the opportunity to transfer over to one of the two companies involved.

In its announcement, Microsoft pledged to continue to develop its Windows 10 mobile operating system, and support Lumia phones, plus device from OEM partners including the likes of Acer, Alcatel, HP, Trinity and VAIO.

It comes just two years after Microsoft acquired Nokia’s handset division for £4.5 billion.

HMD, which was founded last year, is run by former Nokia exec and the head of Microsoft’s Mobile Devices business in Greater Asia, Middle East, and Africa Arto Nummela.

“We will be completely focused on creating a unified range of Nokia-branded mobile phones and tablets, which we know will resonate with consumers,” said Nummela.

“Branding has become a critical differentiator in mobile phones, which is why our business model is centered on the unique asset of the Nokia brand and our extensive experience in sales and marketing. We will work with world class providers in manufacturing and distribution to move quickly and deliver what customers want.”

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