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Microsoft hangs up on Nokia feature phone business

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By John Glenday, Reporter

May 19, 2016 | 1 min read

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.

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