Microsoft Selling Off Feature Phone Business

Business / Microsoft / Mobile / Tech
microsoft feature phones

We all love smartphones,  and so does Microsoft.  The next step down toward “dumb” phones is the feature phone — not as featureless as a dumb phone, but having fewer features and flexibility than a smartphone.  There’s a market for those, too.  But, for a phone maker, at the cost of maintaining focus on its smartphone business.  Microsoft apparently realizes that.

Microsoft’s future in the mobile phone business is now entirely dependent on its Lumia smartphone range after the software giant confirmed on Wednesday that it was selling the feature phone part of the business to a subsidiary of Foxconn and HMD Global, a Finnish company, in a deal worth $350 million — including the rights to use the Nokia brand on future feature phone devices.

FIH Mobile is the Foxconn and HMD Global subsidiary that’s gaining the MS feature phone business, including their Hanoi manufacturing facility.  FIH Mobile is led by a former Nokia executive, Arto Nummela.  Besides the facility, they gain 4500 experienced employees from Microsoft.

The deal involves all of Microsoft’s feature phone assets, which were purchased from Nokia as part of a $7.1 billion deal that is now seen as a major mistake. Those assets include brands, software and services, care network and other assets, customer contracts, and critical supply agreements.

Separate from the MS deal, Nokia also inked a 10 year contract with HMD Global to create a series of Android smartphones and tablets.  Nokia definitely isn’t going away any time soon.  On the other hand, there’s MS, itself.

While Microsoft has struggled to get any traction in the smartphone market — it still holds less than a 3 percent share — sales of feature phones have been declining rapidly in recent years as the cost of entry-level smartphones has plummeted.

Microsoft will continue to focus on their Lumia line, with Windows 10.  But they’ll do that without the distraction of trying to cover the feature phone market.  Despite the fact that MS actually made more money from feature phones than it did from its smartphone business, in the third quarter of last year.

Foxconn recently finalized a deal to take over struggling Japanese tech giant Sharp in a $3.5 billion move that will give the Taiwanese company a significant advantage over competitors when trying to attract business from the likes of Apple and indeed Microsoft.

It seems like Foxconn and related companies are positioning to compete with the likes of Apple, Microsoft, Samsung, and many more  Are you looking forward to a Nokia branded line of feature and smartphones, without the influence of Microsoft? Let us know in the comments below, or on Google+, Twitter, or Facebook.

  Source: International Business Times
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