Microsoft Selling Low-End Nokia Phone Business for $350 Million

Microsoft is selling its feature phone assets to Foxconn subsidiary FIH Mobile Ltd and HMD Global for $350 million, the company announced today. Additionally, FIH Mobile will buy out Microsoft Mobile Vietnam, a manufacturing facility for Hanoi and Vietnam, as part of the deal.

As part of the new arrangement, around 4,500 Microsoft employees are leaving Microsoft. They are transferring to, “or have the opportunity to join,” FIH Mobile or HMD Global, Microsoft said.

This announcement does not affect Microsoft’s existing Windows 10 mobile devices, including its Lumia range. What it means is that Microsoft will “transfer substantially all of its feature phone assets,” which includes brands, software and service, and “critical supply agreements.”

The deal is expected to close in the second half of 2016.

One of the brands included in the sale is Nokia, according to GameSpot sister site CNET. When the deal closes, HMD will make Nokia-branded phones that run on Android

“We will be completely focused on creating a unified range of Nokia-branded mobile phones and tablets, which we know will resonate with consumers,” HMD CEO Arto Nummela said in a statement. “Branding has become a critical differentiator in mobile phones, which is why our business model is centered on the unique asset of the Nokia brand, and our extensive experience in sales and marketing.”

In 2013, Microsoft bought Nokia’s phone business for $7.2 billion. As CNET reports, the move did not exactly go to plan.

“Microsoft agreed to acquire Nokia’s phone business in 2013 in an effort to become relevant in a phone market dominated by Apple’s iPhone and companies such as Samsung that embraced Google’s Android software. But the move failed to turn around the business,” CNET’s Stephen Shankland said.

Head to CNET to see a full breakdown of today’s Microsoft phone announcements.

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