Cell Phones

Microsoft is selling its phone business to Foxconn

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  • May 18th, 2016 6:33 pm
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Deal Addict
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Sep 24, 2013
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Microsoft is selling its phone business to Foxconn

It is not surprising that Microsoft said Wednesday it will sell its entire cheap phone business to FIH Mobile (FXCNY), a Foxconn subsidiary, for $350 million. Will keep the smartphone line up.

http://money.cnn.com/2016/05/18/technol ... oplead-dom
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Deal Expert
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Jun 12, 2007
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Feature phone business only aka "dumb phones"

Microsoft retains the smartphone business
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Sep 24, 2013
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Thanks Corrected in first post
Deal Addict
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Mar 26, 2011
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These are the Nokia candybar and flip phones being sold in developing countries?
Deal Guru
Oct 3, 2006
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No idea why Foxconn would buy this. The market for feature phones will only shrink. Smartphones can be had as cheap $99 now. I see no reason why anyone would choose a feature phone.
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Aznsilvrboy wrote: No idea why Foxconn would buy this. The market for feature phones will only shrink. Smartphones can be had as cheap $99 now. I see no reason why anyone would choose a feature phone.
Places like India still have literacy rates of 75% and only about 80% have access to electricity. There's about a billion people in India, Myanmar, Nigeria that don't have a mobile phone yet and no access to data networks.
Deal Guru
Oct 3, 2006
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Spinner wrote: Places like India still have literacy rates of 75% and only about 80% have access to electricity. There's about a billion people in India, Myanmar, Nigeria that don't have a mobile phone yet and no access to data networks.
You just agreed with me. As quality of life improves, people adapt to newer technologies, not older. Places like India will improve their literacy rates, access to electricity, and basic infrastructure, etc. More people will buy smart phones, not more feature phones. The market for feature phones is shrinking.
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Lets say there are a billion people with smartphones and potential for another 500 million over the next 5 years. That still leaves 5.9 billion people who potential need a phone. I am pulling those numbers out of thin air to make a point.

Remember $100 in many places is still a lot of money, and spending $15 versus $100 can have a big impact on ones budget.
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Aznsilvrboy wrote: You just agreed with me. As quality of life improves, people adapt to newer technologies, not older. Places like India will improve their literacy rates, access to electricity, and basic infrastructure, etc. More people will buy smart phones, not more feature phones. The market for feature phones is shrinking.
You said you have no idea why Foxconn is buying the business unit. I just explained the market for basic phones is still a billion people strong.

Just because the market is shrinking doesn't mean it's a bad purchase if the price is right. Lenovo bought ThinkPad when tablet and mobile sales were clearly declining.
Deal Guru
Oct 3, 2006
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Spinner wrote: You said you have no idea why Foxconn is buying the business unit. I just explained the market for basic phones is still a billion people strong.

Just because the market is shrinking doesn't mean it's a bad purchase if the price is right. Lenovo bought ThinkPad when tablet and mobile sales were clearly declining.
Clearly Foxconn's recent business decisions don't instill confidence in investors because their stock price has been dropping like a rock over the past year. The margins on phones are razor thin and there's no shortage of domestic manufacturers of cheap phones in India. Foxconn just closed a deal to acquire Sharp who is huge debt where debt outweighs assets. If they want to turn Sharp around, they need all the cash injection they can get to play catch up with Korean companies in the OLED business. Spending 350 million on Microsoft's feature phone business at this time is quite questionable.

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