The business is being sold to FIH Mobile LTD which is part of smartphone manufacturing giant Foxconn, the company will pay Microsoft $350 million for their feature phone business. Foxconn, also trading as Hon Hai Precision, is the world’s largest electronics contract manufacturer and is headquartered in Taipei, Taiwan. The transaction is expected to close in the second half of 2016, subject to regulatory approvals and other closing conditions.
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Once the world’s biggest producer of mobile phones, Nokia had been eclipsed By Apple and Samsung which eventually forced it to sell its entire handset business to Microsoft in 2014 and focus entirely on telecoms network equipment. The licensing agreement gives HMD the exclusive use of the Nokia brand on mobile phones and tablets globally for the next decade, according to a company statement by Nokia.
A new company, HMD, has been founded with the goal of putting the Nokia name back on smartphones and tablets.
The Nokia brand still carries a lot of weight in developing nations, where low-priced feature and smartphones are big business, so it’s no surprise HMD is keen to focus on this as well as higher end products.
Nokia said it will receive royalty payments from HMD for sales of Nokia-branded mobile products, covering both brand and intellectual property rights. Microsoft has struggled with the phones business and a year ago wrote off $7.5 billion from the former Nokia unit.
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Nokia said the new Finnish company, HMD Global, is a private venture in which Nokia will not hold equity. Together these agreements would make HMD the sole global licensee for all types of Nokia-branded mobile phones and tablets. In other words, Nokia is back. HMD’s President on closing would be Florian Seiche, who is now Senior Vice President for Europe Sales and Marketing at Microsoft Mobile, and previously held key roles at Nokia, HTC and other global brands.
