Nokia sells off wireless modem business

Renesas Electronics will buy the wireless modem unit for $US200 million

Nokia is selling off its wireless modem business to Renesas Electronics, a move that could help the mobile giant better focus on phone competition and get rid of a business that may have been struggling.

Renesas has agreed to buy the business for $US200 million and will get some Nokia patents as well as 1,100 research and development people. The workers are based in Finland, India, the U.K. and Denmark.

Renesas had been licensing Nokia's modem technology since 2009 and the companies had already been working together on an HSPA+/LTE (High-Speed Packet Access Plus/Long Term Evolution) platform.

As part of the deal, the companies also plan to form a joint research initiative for future radio technologies.

The agreement effectively lets Nokia outsource a component required for its phones that has become increasingly commoditized, wrote Caroline Gabriel, an analyst with Rethink Research, in a note about the announcement.

In addition, while Nokia has been in the lead in coming out with new technology for standalone wireless modems like dongles, other companies have cornered the bulk of that market, she said. Huawei has 53 percent of the global market for standalone wireless modems and ZTE has 30 percent share, according to research from Berg Insight, Gabriel wrote.

The extent to which such companies have cornered the market is evidence in the complaint that Belgium modem maker Option filed last week at the European Commission. Option alleges that Chinese companies are dumping wireless modems into the European Union at unfairly cheap prices.

The agreement could help Renesas Electronics, a company formed earlier this year after the merger of NEC and Renesas Technology, improve its standing among mobile semiconductor makers, Gabriel said. The Nokia technology fills a gap in Renesas' wireless portfolio, offering it the possibility of competing with giants like Qualcomm, she said.

Nokia expects the deal to close in the fourth quarter this year.

Join the PC World newsletter!

Error: Please check your email address.

Tags business issuestelecommunicationNetworkingRenesas TechnologymodemNokiamobile

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Nancy Gohring

IDG News Service

Most Popular Reviews

Follow Us

Best Deals on GoodGearGuide

Shopping.com

Latest News Articles

Resources

GGG Evaluation Team

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Steph Mundell

LIFEBOOK UH574

The Fujitsu LifeBook UH574 allowed for great mobility without being obnoxiously heavy or clunky. Its twelve hours of battery life did not disappoint.

Andrew Mitsi

STYLISTIC Q702

The screen was particularly good. It is bright and visible from most angles, however heat is an issue, particularly around the Windows button on the front, and on the back where the battery housing is located.

Simon Harriott

STYLISTIC Q702

My first impression after unboxing the Q702 is that it is a nice looking unit. Styling is somewhat minimalist but very effective. The tablet part, once detached, has a nice weight, and no buttons or switches are located in awkward or intrusive positions.

Latest Jobs

Shopping.com

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?