Microsoft had bought the iconic Nokia brand handset business a couple of years ago and now it seems that the ex-Finnish brand will exchange hands once again. This time however, Microsoft has agreed to offload its entry-level feature phone business to Foxconn Mobile and this deal is reckoned at $350 million. As part of the deal, Foxconn will also be getting the controls of Microsoft’s manufacturing facility in Vietnam. The deal is inked between Microsoft, Foxconn Technology group and HMD global.
The deal further allows FIH (Foxconn) and HMD global to gain access to the feature phone business, manufacturing units and whatever is left of the Microsoft’s feature phone business assets. The deal will also exercise a complete degree of freedom to control sales, marketing and distribution of the Nokia-Brand mobile phones and tablets. Post the agreement, it is very likely that the current employees working at Microsoft’s feature phone unit will be given a chance to join FIH and HMD global.
That being said, Microsoft still seems to be optimistic about its smartphone business which is also clinging on to the last straw. With Windows 10, Microsoft hoped to make a comeback in the smartphone market but that didn’t happen either. On the other hand, Microsoft has been making a push to market the Windows phones to the enterprise users which is a fair deal considering the increased degree of control the admin gets on the phones.
Incidentally, this deal has been announced just when Nokia is springing back with Android. Nokia has signed a deal with a new company called HMD Global Oy based out of Finland. HMD will be licensed to use Nokia’s brand name globally and produced smartphones and tablets based on Android. 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.
The first thing that struck me like a lightning is the very fact that Microsoft is still in the Feature phone business. As a matter of fact, it is surprising to know that out of the 2.07 billion mobile phones sold in 2015, 0.59 billion were feature phones. This establishes the point that feature phones are still in demand, at least for now. But the real challenge is to do justice to Nokia branded smartphones at a day and age where every smartphone looks similar.