Microsoft looking to shut down Lumia smartphone business and sell Nokia brand to Foxconn

Microsoft is planning to close their feature phone business and license the Nokia brand to Foxconn, according to a new rumor by Chinese site VTech. Simultaneously, word has it that the company is keen on reforming its internal mobile division. Microsoft, which had sold only 15 million handsets in Q1 2016, has rights to the brand for feature phones up to 2024.

Back in April 2014, Microsoft had completed its acquisition of Nokia’s Devices and Services division. In November same year, it revealed the first Microsoft Lumia device, the 535. Also, during the period effective November 2014 until March 2015, the company only manufactured low-end devices, such as the Lumia 430, 435, 532, 540, 636, 638, 640, and 640 XL, indicating that Microsoft wanted to scale back on its mobile hardware production.

There were no new devices until October, when Microsoft produced three Lumias that run Windows 10 Mobile, the Lumia 550, 950, and 950 XL. In February, the Lumia 650 was announced, which was reportedly the last Lumia.

Previous rumors hinted that Microsoft wants to integrate the mobile division into the Surface unit. There are also rumors from VTech that after closing its feature phone group, the remaining part of Microsoft Mobile (which produces Lumia handsets) will be folded into the Surface group, which means that the Surface Phone will remain the only device manufactured by Microsoft. Further, 50% of the current staff of Microsoft Mobile is likely to be laid off. Since its sale to Microsoft in 2014, the division has already suffered more than 18,000 losses.

For some time now, Microsoft has been making more money by licensing its Android patents rather than selling its Windows Phones. With its own mobile hardware now being scaled back, the company has been stressing on their 3rd party OEM business and focusing on the business and enterprise segment for Windows Mobile delivery.

With the Surface Phone expected to be launched in early 2017, we can expect more rumors to appear in the coming months.

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