VietNamNet Bridge - Microsoft on May 18 unexpectedly announced the sale of a mobile phone manufacturing division to Taiwanese and Finnish partners. The factory in Bac Ninh province, Vietnam was included in the deal.

The low value of the deal, at just $350 million, is a big surprise to many people, because it is too low if compared with the amount of $7 billion Microsoft had to pay to buy the global mobile phone manufacturing division from Nokia.

Analysts believe that production activities in Vietnam were the important reason behind the decision.

Five years ago, Nokia Vietnam received the investment license. One year later, it made first products.

On December 18, 2014, Nokia Vietnam was officially taken over by Microsoft as part of the big deal in which Microsoft bought Nokia. The event put an end to the presence of Nokia Group in Vietnam.

In May 2016, Microsoft sold the phone manufacturing division, including the factory in Vietnam, to Taiwanese Foxconn.

The low value of the deal, at just $350 million, is a big surprise to many people, because it is too low if compared with the amount of $7 billion Microsoft had to pay to buy the global mobile phone manufacturing division from Nokia.

Microsoft once hoped that the factory in Vietnam will play the key role in its phone manufacturing strategy all over the world.

Sources said Microsoft plans to shut down all factories in Hungary, a part of its factories in China and change the factory in Mexico into a repair center. 

Meanwhile, the factory in Bac Ninh province, Vietnam would be developed into a development and production center.

With the plan, the investment capital in Vietnam may increase by $220 million and the factory would make 76.4 million products and have export value of $1.86 billion.

In late 2014, a Microsoft senior executive revealed that Microsoft would retain only one phone manufacturing factory in Bac Ninh, Vietnam, if the operation in Vietnam goes smoothly.

However, the plan has failed.

Sources said Microsoft decided to give up the plan because the business performance was below expectations.

It was not easy for Vietnam to persuade Nokia to make investment in Vietnam. The giant claimed to be registered as a high-tech enterprise and asked for special investment incentives, though the factory in Vietnam just does assembling.

The Ministry of Planning and Investment, in a document to the Prime Minister, proposed not to give Nokia investment incentives that go beyond the framework, because the high incentives would affect the investment environment. 

Nokia will only be able to enjoy special preferences if it can meet the criteria to be recognized as a high-tech enterprise.

Finally, Vietnam granted the investment license to Nokia, associated with the agreement on the factory’s development in Vietnam which said Nokia must fulfill the commitments on investment capital, development process, environmental protection and wage policies.

However, the commitments went unfulfilled. 

H. Duy