Nokia sells wireless modem business to Renesas Electronics

In a deal valued approximately USD 200 million, Renesas, the global supplier of microcontroller and semiconductor solutions, will be acquiring Nokia's struggling modem business.

As a part of the deal, Nokia will be handing over its units 1,100 employees in Finland, and other countries to Renesas.

Alliance to pave way for advanced mobile platform solutions
The Finland based mobile communications gaint's modem business has been adversely affected by competition from its Chinese companies like Huawei, and ZTE.

It is not just Nokia's wireless business, the USB market overall has become a low margin business.

The average price of the modems has declined nearly 30 euros to 120 euros in 2007, according to Pal Zarandy, a senior partner in mobile industry analysis firm Rewheel.

The company's alliance with Renesas, is expected to increase the value of Nokia's assets, thus paving way for advanced mobile platform solutions in the market.

Renesas boasts about its engineering expertise that is capable of delivering powerfully built application processors, RF transceiver ICs, high power amplifiers, and wireless modem technologies.

Talking about the alliance, Yasushi Akao, president of Renesas Electronics Corporation, said, “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.”

Acquisition beneficial for Renesas
The takeover of Nokia's wireless modem business will not only help in the development of advanced modem technologies, but also enable the Japan based company to strengthen its position in the mobile solutions market.

The company's alliance with Renesas, is expected to increase the value of Nokia's assets, thus paving way for advanced mobile platform solutions in the market.

Renesas, which is already one of the strong contenders in the 3G and LTE market, believes that it is in the “ideal position to further develop this offering.”

The deal is expected to take place between October and December.