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Here is why Foxconn is acquiring Nokia Feature-phone business from Microsoft

Nokia has announced HMD as its sole partner for Nokia-branded Phones and Tablets. While the smartphone and Tablets will be Android based, HMD will also acquire from Microsoft the rights to use the Nokia brand on feature phones.

HMD has been founded to provide a focused, independent home for a full range of Nokia-branded feature phones, smartphones and tablets. To complete its portfolio of Nokia branding rights, HMD announced today that it has conditionally agreed to acquire from Microsoft the rights to use the Nokia brand on feature phones, and certain related design rights. The Microsoft transaction is expected to close in H2 2016. Together these agreements would make HMD the sole global licensee for all types of Nokia-branded mobile phones and tablets. HMD intends to invest over USD 500 million over the next three years to support the global marketing of Nokia-branded mobile phones and tablets, funded via its investors and profits from the acquired feature phone business.

HMD will not manufacture Nokia-branded feature phones however but Foxconn will buy Feature phone business from Microsoft. Nokia and HMD have signed an agreement with Foxconn to manufacture all Nokia-branded mobile phones and tablets. Foxconn (FIH) will acquire Microsoft’s feature phone business assets, including manufacturing, sales and distribution. HMD will get exclusive access to the Nokia global sales and distribution network to be acquired from Microsoft by FIH. So, this is why Foxconn is buying Nokia-branded feature phone business from Microsoft. In a way all the Nokia assets like manufacturing, sales and distribution are retuning to Nokia via HMD and will be used for future Nokia Phones & Tablets.

As also announced today by FIH Mobile Limited (FIH), a subsidiary of Hon Hai Precision Industries (trading as Foxconn Technology Group), the remainder of Microsoft’s feature phone business assets, including manufacturing, sales and distribution, would be acquired by FIH. HMD and Nokia Technologies have signed an agreement with FIH to establish a collaboration framework to support the building of a global business for Nokia-branded mobile phones and tablets. This agreement will give HMD full operational control of sales, marketing and distribution of Nokia-branded mobile phones and tablets, with exclusive access to the pre-eminent global sales and distribution network to be acquired from Microsoft by FIH, access to FIH’s world-leading device manufacturing, supply chain and engineering capabilities, and to its growing suite of proprietary mobile technologies and components.

 

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