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Nokia's Feature Phone Business Is Sold By Microsoft To Foxconn

By Victor Thomson , May 19, 2016 04:40 AM EDT
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Microsoft has announced a $350 million deal to sell its feature phone business to FIH Mobile, a subsidiary of Foxconn.

Nokia's old feature phone business is still manufacturing low-end handsets like the 222 and 230. According to Engadget, now Microsoft is handing over to Foxconn's subsidiary the rights to use the Nokia brand, services and feature software, but the company reassures its customers that it will still develop Windows 10 and support Windows Phone and Lumia handsets from partnets like VAIO, Trinity, HP, Alcatel and Acer.

The deal also includes the transfer of 4,500 Nokia employees over to Foxconn's subsidiary. Nokia is reportedly planning now to license its brand to a newly created company called HMD global. The company will manufacture and retail a range of Android tablets and smartphones.

The Verge reports that this deal will only affect the feature phone business of Microsoft corporation, currently using the Nokia brand for basic phones. Over the past couple of years, Microsoft has been winding down its feature phone business. Back in July 2014, Nokia X, Series 40 and Asha handsets shifted to "maintenance mode." Ever since, the company has not added any updates or new features to those devices.

In a move to tempt its Symbian users over to its own mobile software, Microsoft's phone business switched focus solely on Windows Phone. However, this attempt has largely failed and in the latest quarter the company experienced a massive 73 percent drop in its sales of Lumia devices, with only 2.3 million units sold.

Nearly 1 year ago, Microsoft shifted its mobile strategy to focus on low-cost devices, flagships and business phones. Terry Myerson, Microsoft's head of Windows, admitted previously that the company is not focusing on Windows Phone this year.

It is unlikely that Microsoft will launch another Lumia phone this year. The company is reportedly giving up Lumia branding as well. More recently, most rumors suggest that Microsoft is focusing on a Surface Phone launch next year.

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