Nokia (NYSE:NOK), better known for handsets and software, is selling its wireless modem business to Renesas Electronics for $200 million. As part of the deal the two companies are establishing a research joint venture to collaborate on future wireless radio technologies.
The deal, which is expected to close in the fourth quarter, is for Nokia's wireless modem technologies for LTE, HSPA+ and GSM standards. The wireless modem market has come under increased pressure recently from Chinese competitors like Huawei and ZTE, and Nokia said the move will allow it to focus on its core handset business. As part of the deal, Nokia will transfer around 1,100 R&D employees to Renesas.
Renesas, a chip maker best known for its microcontroller work, stands to gain in the wireless chip market.
Nokia has come under financial pressure of late. The company issued a warning last month about its upcoming second-quarter financial performance, and said sales and margins in its key devices and services unit will be weaker than expected.
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