A subsidiary of Foxconn buys feature phone business from Microsoft.
Microsoft is cleaning up its phone business. The company announced a deal 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.
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As part of the deal, FIH Mobile Ltd. will also acquire Microsoft Mobile Vietnam, Microsoft'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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This is just another episode of the failed Nokia acquisition. It remains to be seen if Microsoft will ever gain traction in the smartphone market with its Lumia Windows phones.