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Microsoft's feature phone business to be sold to Foxconn for US$350 million

By Bryan Chan & Koh Wanzi - on 19 May 2016, 11:01am

Microsoft's feature phone business to be sold to Foxconn for US$350 million

Microsoft has announced that it is selling its feature phone business to FIH Mobile, a subsidiary of Foxconn, for US$350 million. This is the same Foxconn that makes a whole lot of iPhones for Apple, and the deal will see around 4,500 Microsoft employees move to the Foxconn subsidiary.

Microsoft still uses the Nokia brand for these basic feature phones, and the software giant will hand over a substantial portion of its feature phone assets, including things like the rights to the Nokia brand, phone software, services, and other contracts and supply agreements as part of the deal. The transaction is expected to close in the second half of 2016, subject to regulatory approvals and other closing conditions.

Microsoft’s feature phones are distinct from its line of higher-end Lumia phones that run Windows 10 Mobile, and the latter business is not involved in any aspect of the deal. This means business as usual for Windows 10 Mobile, and the company says it will continue to support Lumia phones and Windows Phone devices from hardware partners like Acer and HP.

The latest move could be seen as part of Microsoft’s efforts to wind down its feature phone business over the past few years. Since its focus switched almost exclusively to Windows Phone (but we all know how that turned out), it has ceased to update devices like the Asha, Series 40, and Nokia X handsets.

As it turns out, Microsoft is rumored to be working on a Surface Phone for launch in 2017. By ditching its feature phone business, the company could be looking to tweak its mobile strategy again, after it said last year that it wanted to focus on flagships, low-cost devices, and business phones.

Source: Microsoft via The Verge