Nokia today announced that it is to sell its wireless modem business to microcontroller firm Renesas as part of a $200 million (£132 million) deal which will end with a formal alliance between the two companies.
Renesas has been paying licenses to Nokia for its wireless modem technology since 2009 and both have been working together on the HSPA+/LTE platform, but this new plan will see Renesas take over Nokia’s wireless modem business, saving it in the long-term on license fees.
As part of the deal Renesas will acquire Nokia’s wireless modem technologies for the LTE, HSPA, and GSM standards. Nokia will be handing over a number of patents it holds relating to wireless modems. It will also be transferring 1,100 of its research and development staff from Finland, India, Denmark, and the UK to Renesas.
Renesas already has a strong focus in the 3G and LTE market, but this acquisition will give it a huge leap up the wireless modem ladder.
The two companies also plan a long-term partnership for research on future radio technology.
“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.
“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,” he added.
The acquisition will depend on standard regulatory approval, but it is expected to occur during the fourth quarter of 2010.