Microsoft sells feature phone unit to Foxconn, Nokia gets back in phone/tablet market

Some interesting phone related news today. First there's news that Microsoft is selling its feature phone business to FIH Mobile, a Foxconn subsidiary, for $350 million. The software giant got its hands on this business as part of its acquisition of Nokia's handset unit, a costly mistake that failed to attract more interest in the Windows Phone operating system.

This deal will only affect Microsoft's feature phone business, which is currently still using the Nokia brand for basic phones. Microsoft says it will continue to develop Windows 10 Mobile and support Lumia phones and Windows Phone devices from partners like Acer, Alcatel, HP, Trinity and VAIO.

The deal involves Microsoft handing over the rights to use the Nokia brand, feature phone software, services, and other contracts and supply agreements, as well as the transfer of 4,500 employees to the Foxconn subsidiary. With this deal, FIH Mobile gains a feature phone production facility in Vietnam.

At the same time, Nokia announced it's licensing its brand and intellectual property to the newly created HMD global, which will design a line of Android-based smartphones and tablets. HMD global has an agreement in place with FIH Mobile "to support the building of a global business for Nokia-branded mobile phones and tablets."

HMD global is based in Finland and will be led by Arto Nummela, a Nokia veteran who moved to Microsoft when the latter company took over the former's mobile business. The new company has agreed a conditional deal with Microsoft to acquire the rights to use the Nokia name on featurephones along with some related design rights. Nummela will be installed as CEO once that transaction is completed, which is expected to happen by the end of June.

Here's an explanation from Nokia about how this all fits together:

The answer to the question you’ve all been asking

We are proud to announce that the Nokia brand will be returning to the worldwide mobile phone and tablet market.

Every day our fans continue to ask for Nokia smartphones. In fact, in a recent survey, we found that Nokia smartphones are amongst the top five considered brands for purchase by smartphone buyers – and they aren’t even available yet.

So, under a new agreement, Nokia Technologies has granted HMD, a new company led by some of the world’s top mobile specialists, an exclusive global license to create a full range of Nokia-branded smartphones, tablets, and feature phones for the next decade.

The new smartphones and tablets will be based on Android, uniting one of the world’s iconic mobile brands, Nokia, with the leading mobile operating system and app development community.

There is still much work for HMD to do, so you’ll need to wait a bit longer to see what the next wave of Nokia phones and tablets look like. One thing we can assure you is that they will exemplify what you have come to expect from all Nokia devices, including quality, design, and innovation.

A big thanks to you and all of the Nokia supporters around the world. You continue to remind us of the difference our devices have made in your lives. We can’t wait for you to meet the next generation.