Calculations behind the $350 million deal to acquire Nokia Bac Ninh factory

Nokia's golden age is over, can the new owners of Nokia bring this brand back to its previous world dominance?

Can Nokia's new bosses revive the brand?

Microsoft Corporation has officially sold its feature phone division for $350 million to FIH Mobile and HMD Global. Previously, when it acquired the Nokia device division, Microsoft acquired ownership of the Nokia brand for phones until 2024.

According to a source, in this deal HMD Global contributed 20 million USD to buy the Nokia brand. Accordingly, HMD is allowed to launch Android smartphones and tablets on the market within 10 years under the Nokia brand.

FIH Mobile spent 330 million USD to own the entire Nokia factory in Bac Ninh. FiH Mobile, HMD and Nokia are working closely together, but each side has its own calculations.

FIH Mobile is part of Taiwan-based Foxconn Technology Group. Before the deal was announced, FIH Mobile had agreed to produce the N1 Android tablet with Nokia and HDM.

Thus, in this deal, Foxconn plays the role of processing, manufacturing, assembling and distributing HDM products. This company also signed a cooperation agreement with Nokia to promote the building of a global business for Nokia-branded mobile devices and tablets.

Foxconn was founded in 1974 in Taiwan and is the world's largest electronics, information technology and computer manufacturer. Foxconn currently has 100 companies and branches worldwide.

In 2013, Foxconn achieved a revenue of 130 billion USD, ranking 30th in the list of the world's largest enterprises. The group mainly processes, assembles, and produces electronic components for phone and computer companies such as Apple, Blackberry, Oppo, Xiaomi... According to the Wall Street Journal, Foxconn is currently responsible for producing iPhone 6/6 Plus with a quantity of more than 540,000 units per day.

In March 2007, the group started building factories in Bac Ninh, Bac Giang and some provinces of Vietnam. Currently, the company has 3 factories processing products such as: landline phones, headphones, wifi transmitters...

This group once announced that it would invest 5 billion USD in Vietnam, but with the shift in capital flows and market demand, Foxconn decided to invest in many countries in the region instead of focusing on one country.

In mid-2015, Foxconn had its investment certificate for the phone manufacturing and assembly factory project revoked by Vinh Phuc province due to slow progress. The project has a total registered capital of 200 million USD on an area of ​​about 485 hectares, and was granted an investment certificate in 2008. After many requests to extend the factory construction progress, Foxconn officially requested to dissolve the company in Vinh Phuc ahead of schedule.

Spending a large sum of money to acquire Nokia Bac Ninh is a strategy that helps Foxconn access the market without having to spend time establishing a new one.

In addition to producing new Nokia-branded product lines in the near future, the Vietnamese technology community expects that this giant will gradually move its assembly and phone production lines to Vietnam. If the Vietnamese phone lines are complete in terms of design ideas, Foxconn can be hired right in Vietnam to produce and distribute them without having to order components or have them assembled in China as before.

Meanwhile, HDM Global is a private company based in Finland. This deal helps the famous phone company return to its homeland after a period of "wandering". HDM will invest more than 500 million USD in the next 3 years to revive the Nokia brand and launch new devices on this brand.

Since the disappearance of the Nokia brand, many groups of entrepreneurs have appeared in their homeland Finland, hoping to create the same miracle as Nokia did. HDM has gathered many former employees and engineers who used to work at Nokia.

The former Nokia executive and current Microsoft Mobile CEO will move to HMD as CEO after the deal closes. In addition, Florian Seiche, a Microsoft mobile executive, will also move to HDM. Nokia is also actively helping HDM inherit the technologies and advantages of Nokia's older generation products to apply to new products.

Thus, the combination of these three giants will likely revive Nokia's product lines in Vietnam.

A new Nokia-branded phone has been circulating on the market. The product is said to have a large screen but is priced in the mid-range segment, running the Android operating system, different from Microsoft's designs after acquiring Nokia.

Producing mobile phones that created the mobile revolution since the 1990s, Nokia has fallen behind in the race with technology giants such as Apple, Samsung, HTC, Sony...

In 2014, Microsoft acquired Nokia's phone manufacturing division and patents for $7.2 billion. The tech giant wanted to compete with Apple and Samsung in the smartphone segment. After acquiring this factory, Microsoft repeatedly announced that it would move factories in China, Hungary, Mexico, etc. to Vietnam. However, this was a forgettable deal for Microsoft.

Nokia Vietnam factory is located in Vietnam - Singapore Industrial Park (VSIP, Bac Ninh), covering an area of ​​65,400m2 with a total investment of 302 million USD. The factory currently only produces feature phones, and has been in operation since June 2013.

According to VnExpress