Microsoft to Sell Feature Phone Division to Foxconn for $350 Million

Microsoft on Wednesday announced it is selling its feature phone assets to FIH Mobile, a subsidiary of Hon Hai Precision that's better known as Foxconn, and HMD Global. The deal, worth $350 million (roughly Rs. 2,343 crores), will see the transfer of Microsoft Mobile Vietnam manufacturing facility to Foxconn, alongside roughly 4,500 employees - depending on local law compliance.

The Redmond giant completed its acquisition of Nokia's mobiles and services division in April 2014. The company has since been selling entry-level feature phones under the Nokia brand, and had phased out the brand for its smartphones, sticking with just Lumia.

The company has been struggling to keep up with Apple and Android OEMs in the smartphone ecosystem, and saw a 46 percent drop year-on-year on mobile revenues this last quarter. Microsoft's Terry Myerson in March admitted that Windows Phone is not the company's focus this year, and that it is seeking other ways to tap the mobile market.

In its press statement announcing the sale of its feature phone division to Foxconn, Microsoft said it will continue to develop Windows 10 Mobile and support Lumia phones, as well as phones from its OEM partners like Acer, Alcatel, HP, Trinity, and Vaio.

The deal is expected to close in the second half of 2016, Microsoft said, subject to regulatory approvals and other closing conditions. The deal will see Microsoft will transfer all its feature phone assets, including brands, software and services, care network and other assets, customer contracts, and critical supply agreements.