The Finnish company, Nokia, used to be a huge player in the mobile phone game until it was shoved aside by new competitors from Silicon Valley.
Most people will have owned a Nokia phone at some point in their lives. One model has gained particular fame for its longevity and has even entered into popular culture as a reference to hardiness and resilience. The Nokia 3310 is almost indestructible and has incredible battery life, and now the company is set to make more phones.
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Low-end Nokia phone unit to get a new lease of life
Microsoft will sell off the low-end phone unit of Nokia that it acquired in 2014. The $350 million deal was announced on Wednesday, with Microsoft selling part of the Nokia business to FIH Mobile, a subsidiary of Taiwan-based manufacturing giant Foxconn, and a new Finland-based company called HMD Global.
The deal will see around 4,500 employees leave the company. HMD will make Android-powered, Nokia-branded phones by “uniting one of the world’s iconic mobile brands with the leading mobile operating system and app development community,” said Nokia Technologies said in a statement.
The new CEO of HMD will be Arto Nummela, who is currently head of Microsoft’s feature phone business. Under the terms of the deal HMD will be given exclusive rights to sell Nokia-branded phones and tablets for 10 years.
Iconic brand set for return to global market
Nummela is a former Nokia executive who is now head of mobile for Microsoft in Asia, the Middle East and Africa, along with the low-end feature phone business. That business includes Asha and Nokia-branded phones, with the latter the focus for Nummela.
“We will be completely focused on creating a unified range of Nokia-branded mobile phones and tablets, which we know will resonate with consumers,” Nummela said in a statement. “Branding has become a critical differentiator in mobile phones, which is why our business model is centered on the unique asset of the Nokia brand, and our extensive experience in sales and marketing.”
Both Microsoft and Nokia have had a rough ride in the past 10 years, losing out due to the rise of Apple, Google and other Silicon Valley companies. While the lower-cost, low-powered feature phones still sell well, there are few people that believe they are the future of smartphones. The trend is towards more computing power and a wider range of apps found on high-end models.
Microsoft to continue working on Windows Phones
Microsoft will receive approximately $20 million from HMD for feature-phone brand and design rights, while FIH will pay around $330 million in return for manufacturing facilities and the sales and distributions network.
Microsoft agreed a deal to acquire Nokia’s phone business in 2013. It was seen as an attempt to keep up with Apple, with its iPhone, and companies making Android-powered smartphones, such as Samsung, however the move had no real effect on its success in the smartphone market.
The company also had its Windows-powered phones, but they are a rare sight. In fact thousands of workers were laid off from Microsoft’s phone division in 2015, and work on the Windows phone software has become a low priority.
However Microsoft will continue to work on Windows 10 Mobile software for high-end phones, including the Lumia range. Work will continue on Windows-powered phones in conjunction with manufacturing partners including Acer, Alcatel, HP and Vaio.
HMD phones will be manufactured by FIH, which will run Microsoft Mobile Vietnam and its Hanoi factory as soon as the deal closes. It is expected to be finalized in the second half of this year.