Nokia is to sell its wireless modem business for around $200 million (131.7 million) to advanced semiconductor solution provider Renesas Electronics.
As part of the deal, Renesas will acquire Nokia's wireless modem technologies for LTE, HSPA and GSM standards, as well as a number of patents from the related technology division.
It is good news for the staff though, as 1,100 of the Finnish mobile giant's research and development employees will be transferred over to the Japanese company.
The firms have also formed an alliance to cooperate on the development of future radio technologies. In particular, they will work on modem technologies for the HSPA+ (Evolved High-Speed Packet Access) and LTE standards.
"Wireless modems are an integral part of today's chipset solutions and we believe that Renesas Electronics, as one of the key chipset vendors in the market, is in an ideal position to further develop this offering," said Kai Oistamo, executive vice president at Nokia.
"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."
Yasushi Akao, president of Renesas Electronics, claimed the deal was a significant step towards his company becoming "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," he said.
The deal is expected to be completed in the fourth quarter of 2010.
In another recent deal, Nokia joined forces with Yahoo to combine the companies' email, instant messaging (IM), maps and navigation services.
