Nokia has announced that it has sold its wireless modem division to Japanese-based electronics company Renesas Electronics for US$200 milion.
The division has been weakened as Chinese rivals have been pushing the price lower. According to the New York Times, the division is selling the modems for 30 euros, substantially down from 120 euros three years ago.
The deal also includes some of Nokia’s patents relating to the deal, and would see the transfer of over 1,100 Nokia Research & Development staff, all based in Finland, India, Denmark and in the UK. Nokia expects the deal to be finalised sometime in the fourth quarter.
The deal is part of a overall alliance between Renesas and Nokia, where they plan to co-operate in developing future radio technologies and continuing to develop the two most popular standards: Evolved High Speed Packet Access (HSPA+) and Long Term Evolution (LTE).
“Wireless modems are an integral part of today’s chipset solutions, and we believe that Renesas Electronics, as one of the key chipset vendors in the market, is in an ideal position to further develop this offering,” Kai Oistamo, Executive Vice President for Nokia, said.
“The alliance enables us to continue to focus on our own core businesses, connecting people to what matters to them with our mobile products and solutions.”
“The agreement with Nokia demonstrates our long-standing commitment to shape the future of advanced mobile platforms and will serve as an important step for us to become a leading mobile platform vendor in the global market. Our collaboration with Nokia will enable consumers to enjoy true mobile cloud computing experiences through our advanced high-speed mobile devices,” Yasushi Akao, the President for Renesas, said.