Foxconn has recently purchased Microsoft’s feature phone business as the Redmond-based software giant is restructuring its mobile unit, and now the company is also taking over its mobile assets in Vietnam, including a facility where Windows Phone devices were produced.

Microsoft originally wanted to close its factories in Vietnam, but according to a report from Digitimes, Foxconn has agreed to pay approximately $22 million (€19.5 million) to take over the local facilities. They will be used for the production of feature phones, but also for other parts that could end up being used in smartphones from other companies.

Foxconn is currently one of the top suppliers for a big number of phone makers, including Apple, and the firm has invested millions in new plants and expanding production capacity at various locations.

For the moment, Microsoft is yet to confirm this new deal, but it makes sense to give up on Vietnam production facilities, especially because it’s working to scale down manufacturing of new phones, as it’s aiming for a more effective Windows 10 Mobile device lineup.

All-in on the Surface Phone

Microsoft’s CEO Satya Nadella said last year that Microsoft would focus on three different phone categories, namely value models, mid-range, and high-end devices. Many believed that Redmond would launch two models for each of them, leading to a total of six phones, but it appears that this plan has changed, and the company is betting all-in on the Surface Phone.

According to people with knowledge of the matter, the Surface Phone could see daylight in spring 2017 as a top high-end device, coming with the best in terms of hardware and feature.

The device will be manufactured by the same team that built the Surface tablet and will follow the same approach, with Microsoft trying to offer a premium device, while the rest of the market will concentrate on expanding the Windows 10 Mobile ecosystem with a wider variety of models.

Microsoft is yet to confirm the Surface Phone, though, so fingers crossed to see the device going live sometime in the first half of 2017.

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