Nokia sells wireless modem business to Renesas

Firms to work more closely on new radio technologies

Nokia is hoping the Renesas deal will help it focus on its core business

Nokia has announced that its wireless modem business is to be acquired by semiconductor company Renesas Electronics for $200m (£131m).

The companies claimed that the deal will strengthen their work on new modem and radio technologies including HSPA+ and LTE.

Kai Oistamo, executive vice president of Nokia, said that the move will allow the firm to focus more clearly on products that its customers demand.

"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," he said.

"Wireless modems are an integral part of today's chipset solutions, and we believe that Renesas Electronics is in an ideal position to further develop this offering."

Renesas president Yasushi Akao added that the new technology will enable the firm to develop products allowing customers to run mobile cloud computing services.

"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 said.

Forrester analyst Ian Fogg suggested that the move represents Nokia's continued repositioning as it looks to reclaim lost ground, but warned that the company could find itself further adrift if it does not act quickly.

"Nokia is very inward facing at the moment and is trying to work out its strategy to compete with other major players in the market," he said.

"Nokia must make sure that it doesn't take its eye of the market and what its rivals are doing. The mobile market is very fast paced and it could risk falling further behind if it doesn't ensure that it remains up to date."