Nokia phones are making a comeback thanks to a licensing deal struck between Microsoft, FIH Mobile—a subsidiary of Foxconn—and HMD global Oy.
Microsoft is selling its feature phone business to the two companies for £242 million (~$350 million), and will include some 4,500 employees, as well brands, software and services, care network, and its Vietnam-based manufacturing facility Microsoft Mobile Vietnam.
Those facilities, as well as Microsoft's feature phone technology, will be used to create new Nokia phones as part of an "exclusive global" licensing agreement between HMD global Oy and Nokia Technologies. The deal will allow HMD to produce phones and tablets bearing the Nokia brand name for the next 10 years. While no devices have been announced just yet, HMD plans to invest $500 million into the venture.
Nokia will also provide HMD with branding rights and cellular patent licences in return for royalty payments, but notes that it will not be making a financial investment in HMD.
While it's unlikely that Nokia feature phones, despite the nostalgic brand name, will make a splash in mature markets like the US and UK, feature phones continue to sell well in developing markets where cost remains the single biggest barrier to entry for consumers. Microsoft stopped developing feature phones—the likes of the Asha, Series 40, and Nokia X handsets—back in 2014, with one of the last to appear being the Nokia 215, which was notable for sporting a promised month-long battery life.
As for the rest of Microsoft's smartphone business, the company promises that it will continue to support the likes of the Lumia 650, Lumia 950, and Lumia 950 XL. Windows Mobile phones from OEM partners will also continue to be supported. How long that will last, however, is unclear.
Earlier this year, Microsoft admitted that the smartphone business wouldn't be a priority this year, and the slow rollout of Windows Mobile 10, as well a huge drop in Lumia sales from 8.6 million to 2.3 million units in the last quarter, doesn't bode well. However, rumours suggest that Microsoft may be working on a Surface phone to capitalise on the success of its tablet and laptop line.
Meanwhile, Nokia has kept itself busy since the sale of its smartphone business with the likes of the Nokia N1 Android tablet, as well as the quirky Ozo, a £43K, 360-degree camera designed to capture footage for use in virtual reality.
