NOKIA ISN’T DOING well and the company is now looking at offloading its wireless modem business unit to Renesas for roughly $200 million, not exactly what you’d call pocket change. However, Nokia isn’t giving up its wireless modem products, instead Nokia and Renesas has signed a strategic business alliance to develop HSPA+ and LTE products.
The sale of the wireless business unit isn’t expected to close until the fourth quarter this year. If it’s all approved by both Nokia and Renesas as well as any potential government pitfall, then Renesas is set to end up with no less than some 1100 Nokia R&D staff, access to an undisclosed number of patents and of course the wireless modem business itself which covers GSM, HSDPA and LTE technology.
So what does Nokia get out of this deal? Well, lower costs for one, as although Nokia won’t stop selling devices without wireless modems in them (think smartphones), but the strategic business alliance also means that Nokia will most likely get first dibs on anything new coming out of Renesas and most likely at a decent discount. This isn’t really a bad deal, especially when you consider that Nokia sold off its ASIC design business unit to STMicroelectronics back in 2007 and then there’s the Nokia Siemens Network business that was also founded in 2007. This means that Nokia is pretty much a handset design and software company now, rather than a company that makes its own ICs.
Hopefully this means that Nokia can now focus on its core business units, as the company’s latest handsets have proven to be anything but popular with the masses. The big thing for Nokia now is to get some decent products into the market, especially based on its joint venture with Intel, MeeGo. Nokia’s future in the smartphone market might very well live and die with the success of MeeGo, as Symbian just isn’t competitive in its current form, or upcoming form, as a smartphone OS, compared to the competition.
As for Renesas, well, after its merger with NEC Electronics, Renesas has been busy putting out new products at an astonishing rate, although its USB 3.0 host controllers might be the most well known product at the moment. An interesting side note is that Renesas joined the Symbian Foundation, although most of this seems to be related to development for NTT Docomo’s FOMA products in Japan, rather than to do with today’s announcement. Considering that Renesas delivers components to all of the major mobile phone manufacturers in Japan, buying Nokia’s wireless modem business unit seems to make a lot of sense on many levels, least not for its local market in Japan.S|A
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