Nokia to exit wireless modem business
KEVIN J O’BRIEN
Berlin, 6 July
okia said Tuesday it
N would sell its wireless
modem business, which
has been hurt by Chinese com-
petition, to Renesas Electronics
of Japan for $200 million.
Prices for the devices have
plunged over the last three years
amid competition from Huawei
and ZTE, both based in China.
Pal Zarandy, a senior partner
at Rewheel, a mobile industry
analysis firm in Helsinki, said
the average price for wireless
broadband modems is now about
30 euros, or $38, down from 120
euros in 2007. Most mobile op-
erators in Europe give away wire-
less broadband modems, which
are typically plug-in USB sticks,
to attract new mobile broadband
customers.
“The USB market has be-
come a very low margin busi-
ness,” Zarandy said. “Nokia has
apparently decided it is better to
concentrate on more profitable
aspects of the business.”
As part of the transaction,
Nokia said it would transfer 1,100
Nokia employees in Finland,
Denmark, India and Britain to
Renesas, a Tokyo-based mak-
er of handset components. Nokia
said it expected to complete the
deal in the fourth quarter.
In a statement, Nokia de-
scribed the sale as part of a long-
term alliance to develop tech-
nologies for the two most pop-
ular wireless broadband stan-
dards: Evolved High Speed Pack-
et Access (HSPA+) and Long
Term Evolution (LTE).
“The planned transfer of
Nokia’s wireless modem busi-
ness enables Renesas Electron-
ics to maximise the value of A file photo of the Nokia headquarters in Helsinki, Finland. PHOTO: REUTERS
Nokia’s technology assets and
engineering expertise in deliv- chipsets from outside suppli- nections using LTE and HSPA+ high-tech industry by the Eu-
ering advanced mobile platform ers instead of making them in- technology accounted for 17 per ropean Union. Chinese exports
solutions to the market by com- house. In its latest filing with the cent of all broadband connec- of machinery and electronics in-
bining them with Renesas Elec- US Securities and Exchange tions in Europe at the end of 2009, to Europe reached $146.6 billion
tronics’ market-proven multi- Commission, Nokia listed Broad- and 7.1 per cent in the United in 2009, according to Chinese
media processing and RF tech- com, Qualcomm, Infineon, a Ger- States and Canada, according to government figures.
nologies,” Nokia said. man chip maker, and STE, a joint Berg Insight, a mobile telecom- According to Berg Insight,
The business Nokia is selling venture of ST Microelectron- munications research firm in a mobile research firm in Gothen-
to Renesas makes internal wire- ics of France and Ericsson based Gothenburg, Sweden. burg, Sweden, Huawei is the Eu-
less modems for Nokia handsets in Geneva, as chipset suppliers. Last week, the European ropean market leader in wire-
as well as external, USB sticks Doug Dawson, a Nokia Commission said it had opened less broadband modems, with
for laptop computers. As hand- spokesman, said the compa- an investigation into a complaint an estimated 53 per cent of the
set manufacturing has evolved, ny would continue to purchase by Option, a Belgian maker of market, followed by ZTE, with
wireless modems are increas- wireless modems from its cur- wireless modems, which charges 30 per cent.
ingly being included in larger, rent chipset suppliers. “The di- that unidentified Chinese com- Other Chinese exporters of
multi-function chipsets along vestment allows us to focus on petitors were dumping wireless wireless modems to Europe in-
with the phone engine, applica- our core business of mobile so- modems at “unfair prices” in clude Asus and Foxconn.
tions processor, power manag- lutions and mobile phones,” Europe.
er and software. Dawson said. The antitrust investigation is ©2010 The New York
In 2007, Nokia began buying Wireless broadband con- the biggest so far into China’s Times News Service