According to recent updates in the global smartphone industry, Microsoft has announced that it’s selling its feature phone business for $350 million to FIH Mobile, subsidiary of Foxconn – the Chinese hardware manufacturer which makes iPhones for Apple. On the other side, Nokia is planning to comeback with Android powered devices having licensed its brand name to HMD Global Oy.
The Microsoft – FIH deal will transfer feature phone business, Nokia brand name, Microsoft Mobile Vietnam (the manufacturing facility), and approximately 4,500 employees to FIH Mobile. The transaction is expected to close in the second half of 2016. However, Microsoft will continue to develop and focus on Windows 10 Mobile platform and will continue support for devices such as Lumia 650, Lumia 950 and Lumia 950 XL, and phones from OEM partners like Acer, Alcatel, HP, Trinity and VAIO.
After the Microsoft transaction is completed, HMD Global Oy – a newly formed company based in Helsinki, Finland, will have the rights to sell Nokia-branded devices (feature phones, Android smartphones, 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.”
HMD’s new smartphone and tablet portfolio will be based on Android
“HMD’s new smartphone and tablet portfolio will be based on Android, uniting one of the world’s iconic mobile brands with the leading mobile operating system and app development community.”
As clarified by Microsoft, this will not effect the Windows powered devices in any way. In fact, according to Microsoft, this will help the company have more and dedicated focus on Windows platform and ecosystem. Also note that there is no news about any upcoming Lumia or Surface Phone in coming months.
In Nokia-HMD deal, The former will grant the latter, an exclusive global license to build Nokia-branded devices for next 10 years. HMD will have to pay royalties to Nokia Technologies for every sale of a Nokia-branded product.
This deal can be justified as a process of shifting the Nokia-brand back to its parents as it was planned already that Nokia may start making smartphones in 2016.