Nokia To Sell Modem Unit For $200 MillionNokia To Sell Modem Unit For $200 Million

The traditional wireless modem business may be slipping, but Nokia and Renesas Electronics are teaming up to develop new advanced modem technologies for LTE and HSPA+.

Announced Tuesday, the deal calls for Renesas to purchase Nokia's wireless modem business for about $200 million. About 1,100 Nokia research & development professionals -- mostly in Finland, India, Denmark, and the United Kingdom -- are slated to make the move to Renesas.

"Wireless modems are an integral part of today's chipset solutions," said Nokia's Kai Oistamo, executive VP, in a statement. "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."

In addition to focusing their R&D attention on LTE and HSPA+, the Nokia-Renesas partnership will support the entire range of modem protocols from GSM to LTE, the companies said. With LTE expected to gradually roll out in the coming months, Nokia will likely be better positioned to take advantage of the high-speed broadband technology as LTE consumer products begin to hit the market.

An LTE network is already up and running in Norway and Sweden, and Verizon Wireless has said it plans to introduce its LTE network in the United States before the end of the year.

Nokia indicated the new alliance will draw on the strengths of Nokia's GSM, HSPA, and LTE technologies and on Renesas' strengths in radio-frequency transceiver integrated circuits, high power amplifiers, and power management devices.

"Our collaboration with Nokia will enable consumers to enjoy true mobile cloud computing," said Yasushi Akao, president of Renesas. "In line with our ongoing efforts to strengthen our business structure, the transferring wireless modem technology and the innovation power and expertise of Nokia's employees will perfectly complement our core competencies and serve as (the) key driving forces."

The agreement calls for Nokia to transfer certain patent rights to Renesas, which has licensed Nokia's modem technologies since 2009. The two firms have been working together since 2009 to develop an LTE/HSPA+ platform.

Once the undisputed leader in cell phone market share, Nokia has recently come under competitive pressure from other phone manufacturers, particularly iPhone and Android smartphones.