Microsoft is selling its feature phone business for $350 million

The acquisition of Nokia’s handset division was supposed to give Microsoft a solid platform on which to build a successful mobile business, while the launch of Windows 10 Mobile was supposed to kickstart that mobile business, but we all know how that turned out. Although it’s not giving up on the mobile market just yet, Microsoft announced on Wednesday that it’s selling its feature phone business to a subsidiary of Foxconn and a new company by the name of HMD Global for $350 million. It’s important to note that Microsoft is only selling its feature phone business, not its smartphone business, so we may still see a Surface Phone in the future.

Microsoft is selling its feature phone business to FIH Mobile, a subsidiary of Foxconn, for $350 million. The deal will see 4,500 employees transfer over to Foxconn’s subsidiary, and Microsoft handing over the rights to use the Nokia brand, feature phone software, services, and other contracts and supply agreements. 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. Microsoft has been winding down its feature phone business over the past couple of years. Asha, Series 40, and Nokia X handsets all shifted to a “maintenance mode” back in July 2014, and Microsoft has not added any new features or updates to those devices ever since. Microsoft switched its phone business focus solely to Windows Phone, in a move to tempt its installed base of feature and Symbian users over to its own mobile software. That has largely failed, and Microsoft only sold 2.3 million Lumia devices in the latest quarter, a massive 73 percent drop from the 8.6 million in the same period last year.