Microsoft has announced that it is planning to sell its feature phone division to a subsidiary entity belonging to Foxconn in a deal worth $350 million. Such a deal will also cause Nokia to make a long awaited return to releasing mobile phone products, something which it did really well almost a decade ago.
The deal will involve the software giant selling just about every phone asset under its name to a company called FIH Mobile Ltd, a firm owned by Foxconn, an electronics powerhouse name based in Taiwan, and to HMD Global Oy, a newly founded corporation with headquarters in Finland. It estimated that 4,500 employees of Microsoft will be granted the option of moving to FIH Mobile. Moreover, the $350 million deal includes Microsoft’s production plant located in Vietnam. Microsoft has confirmed that it has plans to continue developing Windows 10 Mobile, plus keep on providing support for the Lumia lineup of smartphones as well as other Windows Phone powered handsets built by other manufacturing partners.
But what will really make certain (and nostalgic) mobile users excited is the part of the deal that would allow Nokia to get back to an arena that it had once lorded over. The deal effectively hands Nokia an exclusive worldwide branding and licensing contract with HMD Global Oy, which includes smartphones and tablet devices. Nokia will provide HMD Global Oy with branding rights and cell standard essential patent licenses in exchange for royalty payments, but will not be investing financially nor holding equity in HMD Global Oy.
As stated by Nokia via a press release, HMD Global Oy was established to offer a home for a wide range smartphones and tablets branded with the Nokia name. In order to fill up its Nokia branding rights portfolio, HMD Global Oy is set to acquire from Microsoft the rights to fully utilize the Nokia brand name on mobile devices. And Android fans will delighted to know that HMD Global Oy’s portfolio will be based on Google’s mobile operating system.
It is no secret that the mobile industry is a dog eat dog world. Because the level of competition is so tough, it would be really difficult for new entrants (or in the case of Nokia, returning ones) to make a mark in the business. Nokia’s deal with HMD Global Oy gives it some needed resources not only in getting back in the game, but even tapping into fresh new mobile markets where Nokia still enjoys brand recognition.
