Microsoft has conceded its $7.2bn acquisition of Nokia in 2014 was a bad call by offloading its feature phone business to HMD Global, for $350m.
The budget end of the phone market remains strong in some parts of the world with consumers drawn to a range of low powered devices capable of running just a small number of apps with sales of over 400m units recorded in 2015.
Under the terms of the deal HMD, a partnership between private equity firm Smart Connect and Taiwanese firm Foxconn, will continue to use Nokia branding for a period of ten years.
HMD chief executive Arto Nummela said: “Branding has become a critical differentiator in mobile phones, which is why our business model is centred on the unique asset of the Nokia brand and our extensive experience in sales and marketing.”
In a separate agreement, HMD has acquired the exclusive rights to use Nokia's branding for a new range of smartphones and tablets.