Microsoft gets out of featurephone business

Now a new rumour by Chinese site VTech states that Microsoft is planning is shutter their feature phone business, which sold only 15 million handsets in Q1 2016, and license the Nokia brand to Foxconn. Microsoft has rights to the brand for feature phones up to 2024.

At the same time VTech reports that Microsoft will fold the rest of the Microsoft Mobile business (the Lumia smartphone business) into the Surface team and will likely lay off 50% of the current staff of Microsoft Mobile. The division has already suffered more than 18,000 losses since its sale to Microsoft in 2014.

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Microsoft Corp. on Wednesday announced it reached an agreement to sell the company’s entry-level feature phone assets to FIH Mobile Ltd., a subsidiary of Hon Hai/Foxconn Technology Group, and HMD Global, Oy for $350 million. As part of the deal, FIH Mobile Ltd. will also acquire Microsoft Mobile Vietnam — the company’s Hanoi, Vietnam, manufacturing facility. Upon close of this deal, approximately 4,500 employees will transfer to, or have the opportunity to join, FIH Mobile Ltd. or HMD Global, Oy, subject to compliance with local law.

Microsoft will continue to develop Windows 10 Mobile and support Lumia phones such as the Lumia 650, Lumia 950 and Lumia 950 XL, and phones from OEM partners like Acer, Alcatel, HP, Trinity and VAIO.

As part of the deal, Microsoft will transfer substantially all of its feature phone assets, including brands, software and services, care network and other assets, customer contracts, and critical supply agreements, subject to compliance with local law. The transaction is expected to close in the second half of 2016, subject to regulatory approvals and other closing conditions.

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