Nokia sells wireless modem business to Renesas in bid to refocus
By Thomas Ricker 
posted July 6th 2010 4:30AM
posted July 6th 2010 4:30AM
P.S. Though the 'Shop above only shows a Nokia USB modem, the agreement goes much deeper to cover the modem technologies used inside billions of Nokia handsets. So yeah, this is a fairly significant change of direction for Nokia.
Renesas Electronics to acquire Nokia's wireless modem business; companies to form strategic business alliance for modem technology development
Espoo, Finland and Tokyo, Japan - Renesas Electronics Corporation, a premier supplier of advanced semiconductor solutions, and Nokia Corporation, the world leader in mobile communications, today announced that they are deepening their collaboration by forming a strategic business alliance to develop modem technologies for HSPA+/LTE (Evolved High-Speed Packet Access / Long-Term Evolution) and its evolution.
As part of this alliance, the companies have entered into an agreement whereby Renesas Electronics is to acquire Nokia's wireless modem business for approximately USD 200 million. The alliance is planned to be enhanced by long-term joint research cooperation on future radio technologies.
The planned transfer of Nokia's wireless modem business enables Renesas Electronics to maximize the value of Nokia's technology assets and engineering expertise in delivering advanced mobile platform solutions to the market by combining them with Renesas Electronics' market-proven multimedia processing and RF technologies. Together with Renesas Electronics' robust line-up of application processors, RF transceiver ICs, high power amplifiers, and power management devices, the wireless modem technologies enable Renesas Electronics to deliver a complete mobile platform solution to the market.
The wireless modem business to be transferred to Renesas Electronics includes Nokia's wireless modem technologies for LTE, HSPA and GSM standards, which have been used for billions of handsets in the global market over the years. Further, Nokia transfers Renesas Electronics certain patents related to the transferred technology asset. The planned transfer would also include approximately 1,100 Nokia R&D professionals, the vast majority of whom are located in Finland, India, the UK and Denmark.
The planned transfer is expected to further strengthen Renesas Electronics' position as one of the leading chipset vendors in the 3G and LTE market that is capable of providing one-stop mobile platform solutions, supporting an extensive range of modem protocols from GSM to LTE, and integrating advanced multimedia and computer processing capabilities.
"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," said Yasushi Akao, President of Renesas Electronics Corporation. "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 competences and serve as the key driving forces in growing our mobile business in the global market."
"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. 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," says Kai Oistamo, Executive Vice President, Nokia.
Renesas Electronics has licensed the Nokia modem since 2009 and the two companies have been working together to develop an industry-leading HSPA+/LTE platform. "I believe that the integration of the world class Nokia wireless modem into Renesas Electronics' strong multimedia processing and RF capabilities, places Renesas Electronics in a strong position in HSPA+/LTE chipsets," says Oistamo.
In order to implement the planned business transfer, Nokia will start the appropriate personnel consultation process with its personnel representatives according to each applicable jurisdiction's labor law requirements. The transfer is subject to regulatory approvals and other customary closing conditions, and is estimated to take place during the fourth quarter 2010.
Espoo, Finland and Tokyo, Japan - Renesas Electronics Corporation, a premier supplier of advanced semiconductor solutions, and Nokia Corporation, the world leader in mobile communications, today announced that they are deepening their collaboration by forming a strategic business alliance to develop modem technologies for HSPA+/LTE (Evolved High-Speed Packet Access / Long-Term Evolution) and its evolution.
As part of this alliance, the companies have entered into an agreement whereby Renesas Electronics is to acquire Nokia's wireless modem business for approximately USD 200 million. The alliance is planned to be enhanced by long-term joint research cooperation on future radio technologies.
The planned transfer of Nokia's wireless modem business enables Renesas Electronics to maximize the value of Nokia's technology assets and engineering expertise in delivering advanced mobile platform solutions to the market by combining them with Renesas Electronics' market-proven multimedia processing and RF technologies. Together with Renesas Electronics' robust line-up of application processors, RF transceiver ICs, high power amplifiers, and power management devices, the wireless modem technologies enable Renesas Electronics to deliver a complete mobile platform solution to the market.
The wireless modem business to be transferred to Renesas Electronics includes Nokia's wireless modem technologies for LTE, HSPA and GSM standards, which have been used for billions of handsets in the global market over the years. Further, Nokia transfers Renesas Electronics certain patents related to the transferred technology asset. The planned transfer would also include approximately 1,100 Nokia R&D professionals, the vast majority of whom are located in Finland, India, the UK and Denmark.
The planned transfer is expected to further strengthen Renesas Electronics' position as one of the leading chipset vendors in the 3G and LTE market that is capable of providing one-stop mobile platform solutions, supporting an extensive range of modem protocols from GSM to LTE, and integrating advanced multimedia and computer processing capabilities.
"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," said Yasushi Akao, President of Renesas Electronics Corporation. "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 competences and serve as the key driving forces in growing our mobile business in the global market."
"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. 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," says Kai Oistamo, Executive Vice President, Nokia.
Renesas Electronics has licensed the Nokia modem since 2009 and the two companies have been working together to develop an industry-leading HSPA+/LTE platform. "I believe that the integration of the world class Nokia wireless modem into Renesas Electronics' strong multimedia processing and RF capabilities, places Renesas Electronics in a strong position in HSPA+/LTE chipsets," says Oistamo.
In order to implement the planned business transfer, Nokia will start the appropriate personnel consultation process with its personnel representatives according to each applicable jurisdiction's labor law requirements. The transfer is subject to regulatory approvals and other customary closing conditions, and is estimated to take place during the fourth quarter 2010.
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Engadget u guys have one awesome photoshop dude/dudette.
@vishal1082
Then plz dont comment.
Good to see Nokia focusing their strategy and being more dedicated! Hopefully some nice, well-thought-out phones come from them soon.
@lexitu
Absolutely. Nokia is in need of a shake-up, and focus is important in a bursting business like mobile. Once they could offer *all* the technology coupled with the mobile all the way to most back end stuff. Today, they need to decide if they're a consumer hardware manufacturer, a backend systems deployer, an operating system developer, whatever.
Sorry Nokia, there's too much competition for you to do it all. Start making some awesome Androids and sell them by the millions to developing countries like only you know how to do! Seriously, just do what you do best and make phones! Trust me, there's a lot of money there.
@Invader Par
And you Sir, get the award for the fastest "Use Android!!!!" comment on this thread.
I think we need a Android vs MeeGo Youtube video on the lines of the iPhone vs Evo one coz the Android fanbois sound the same as the iPhone drone. Anybody game? ;-)
@naashak
MeeGo FTW ;)
Nokia has 1100 surplus radio tech workers; others can't get enough... ;-)
@stewie325
ba-dam-TISH!
@Ryzvonusef
Damn, I forgot to ask, how does this affect us consumers?
I rather enjoyed the picture.
@Stengo
+1 good Photoshop. Was the hand on the right always so small?
@fais
never noticed this b4 but it actually is that small. probably a kids hand.
@ssguy
it is :) i think it is supposed to represent a father and son
Less distraction from the core business should do them good. Focus, focus, focus!
@Discourse But communications engineering is Nokia's core business. It does not matter if it is a phone or a modem, the RF and communications engineering is the same. The same toolbox is used to deal with wireless transmission impairments, the same signal processing is used and much of the same electronics.
I think that the profit margins in the mobile modems market are so small that Nokia does not want to bother. With a structure of a big international corporation there might even be losses. If the profit margins are small, then you need to keep your company mean and lean, but being a huge company means a lot of administrative and managerial overhead.
I doubt also that Nokia is getting rid of their wireless communications patents. They would shoot themselves in the foot.
@stoffer
Yes, but makes no sense to have it in-house anymore, modem business is a commodity these days. By selling the asset to Renesas they can cut cost, and extend their supplier chain and get better price. Plus the modem segment is getting more competition from old and new players.
So its a win-win Nokia can cut cost and boost profit margins and Renesas can fill a gap in the wireless portfolio and create platforms and go head to head with the likes of Qualcomm and STE etc. Renesas has probably much easier task selling their modem tech to the large dongle makers like Huawei and ZTE that Nokia competes with on two fronts handsets and infrastructure.
And about the patents I totally agree, patents is the most important asset they have.
With the battle set between android and apple, two new warriors will come by the end of this year - Microsoft (WP7) and Nokia (Meego)
@symbian
I think it's gonna be a battle between WP7 and Meebo. Neither will be able to keep up with Android and iOS.
Focus and direction is key. Looks like they're on the road to pulling it off. Hope the employee's transitinn will be smooth.
"The wireless modem business to be transferred to Renesas Electronics includes Nokia's wireless modem technologies for LTE, HSPA and GSM standards, which have been used for billions of handsets in the global market over the years."
The patents that Nokia've sued Apple for? Hmm...
@GeceBekcisi
Hmm this was covered a bit differently on other news site.
It was said that wireless modems are sold to Renesas and Nokia makes strategic alliance with Renesas to develope LTE, GSM etc techs.
I doubt Nokia is doing anything to it's most important patents. Nokia Siemens Network got 70 000 people working and Nokia owns 65% of all GSM patents.
So.... this like paying Renesas 200mill. to do the work for nokia ??
like Pdexter said above this is Nokia most important patent so i doubt Nokia will just sell this for 200M.
@Raffstyle
I agree the most essential patents are worth billions. So its probably some patents that they no longer need when they offload the modem business.
I think its good that they sold the modem business, it did not make much sense to keep it after they sold the chip business to ST a few years ago.
it symbolizes the collapse of Nokia
May symbolise something completely different:
- Nokia are exchanging lawsuits with Apple
- Nokia have massive share of the "normal" phone sector but limited in - Smartphone.
- Symbian is seen as a failed OS compared to iOS and Android
- Apple need to get iPhone on other carriers but are tied to AT&T.
- Apple are being investigated for restrictive trading practices thru iTunes
So:
The resolution of the lawsuit business is that Nokia drop it and in exchange Apple licence iOS to Nokia for a new Smartphone that is sold through Verizon (so not breaking Apple deal with AT&T). Gives Nokia access to iTunes store, gives Apple fans who are unhappy with AT&T another option and gives Apple a strong partner to head off Google/HTC and co.
Win for both parties.
Pie in the sky? Maybe but would make sense of something I heard from a friend in the Finnish stockmarket.
@Gusty What are you taking? I want it!
@Gusty
- Lawsuits is not related to the subject.
- Nokia has the same massive marketshare in the smartphone segment, they are larger then RIM and Apple together.
- Symbian works well for E series and C and X series devices, its small and fast but lacks much of the eye-candy. MeeGo is much better OS to go head to head against Android and iOS.
- Globally they have other carriers,and the AT&T deal expires maybe in January 2011.
- Nokia have their Ovi store, so no need for iTunes.
The resolution of the lawsuits is a cross-license agreement. Why in the world would Apple license iOS when they haven't licensed Mac OS X, its simply not their style. And Nokia and Intel has a promising OS in MeeGo, and then there is Android.
@Gusty
Atta boy!!
ROTFLMAO!
@Gusty "symbolise something completely different" whatever you're smoking leave it for a couple of days and get back to reality. Not everything on engadget evolves around your precious iCrap!