It's Official: Microsoft Selling Feature Phone Business To Foxconn For $350 Million


Microsoft officially announced that it entered an agreement to sell its feature phone business to FIH Mobile, a Hon Hai/ Foxconn Technology Group, and HMD Global.

News about the deal surfaced a couple of days ago, and it seems that reports were spot on. The deal is worth $350 million and FIH Mobile will also buy Microsoft Mobile Vietnam, which is the company's manufacturing plant located in Hanoi, Vietnam.

According to Microsoft, the deal is still subject to regulatory approval and other conditions, but it's expected to close in the second half of this year.

Under the new agreement, Microsoft will fold virtually all of its feature phone assets, including software, brands and services, customer contracts, care network, critical supply agreements and other assets.

Roughly 4,500 employees "will transfer to, or have the opportunity to join" HMD Global or FIH Mobile once the deal is completed, subject to local law, Microsoft points out.

The company also pledged to keep developing Windows 10 Mobile and continue supporting Lumia smartphones such as the Lumia 650, Lumia 950 and 950 XL, as well as phones from manufacturing partners such as Alcatel, Acer, HP, VAIO and Trinity.

At the same time, while promising continued support, Microsoft makes no mention of any plans to bring additional Lumia handsets to market. This could indicate that Microsoft is preparing to take a step back from the mobile market, but it remains to be seen.

The company is still rumored to be working on a Surface Phone, albeit no official information is available in this regards.

The changes in Microsoft's mobile division were expected for quite some time now, as things weren't really working out. Microsoft bet big on mobile back in 2014, when it acquired Nokia's smartphone business in a $5.4 billion deal, but it never saw much success on this front.

Microsoft still hasn't managed to get a more significant share of the ever-crowded smartphone market, and it's still lagging behind rivals.

It will be interesting to see how things will unfold with this new scheme, but Microsoft's mobile days seem to be numbered. We'll keep you up to date as soon as more details hit the surface, so stay tuned.

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