Nokia Renesas Modem
Nokia reported in July a $200 million transaction to sell off its wireless modem division to Japan's Renesas Electronics Corporation
. Per the agreement, Nokia will send its wireless modem technologies for LTE, HSPA and GSM standards and about 1,100 Nokia research and development personnel to Renesas, the majority of which are based in Finland, India, the UK, and Denmark.
Prices for wireless modems have dropped during the last several years amid competition from Huawei and ZTE, both within China.
Huawei is the European market leader in wireless broadband modems, with an estimated 61 percent of the market, followed by ZTE, with 29 percent. Put simply, the Chinese control 90 % of the U.S.B. wireless modem market.
The typical selling price for wireless broadband modems was about $38, down from $175 in 2008. Many mobile operators in Europe now give away wireless broadband modems, which are usually typically plug-in U.S.B. sticks, to draw in new mobile broadband buyers.
The U.S.B. market has changed into a minimal-margin business. Nokia has apparently determined it is better to deal with more profitable parts of the industry.
A week ago, the European Commission said it had opened an inquiry into a grievance by Option, a Belgian maker of wireless modems, which stated that anonymous Chinese competitors were dumping wireless modems, or selling them at under the expense of production, in Europe.
This is apparently just another instance of the Communist Chinese using tax paying dollars to trade products beneath market cost successfully eliminating the competition. After 5 to 10 years of doing this, almost all of the competitors go out of business or like Nokia, move on to other pursuits, and only then do the Chinese begin raising their prices once they have done away with every one of the competition.
It is a technique that G9 countries have asked China to end. I believe what should come about is all countries really need to start putting up tariffs on Chinese products until they comply.
Renesas Electronics isn't a publically traded company however it is among the world's largest semiconductor businesses. It was established in the 2010 merger of NEC Electronics and Renesas Technology, two chip makers that had been ranked second and first in the world-wide market for microcontrollers, the chips that operate computer printers, microwave ovens, and other relatively simple electronic products. Chips created by Renesas Electronics are used in auto engines, digital cameras, flat-panel televisions, PCs and computer peripherals, refrigerators, toys, washing machines, and wireless phones, among other applications. Ownership of Renesas Electronics is shared among Hitachi, Mitsubishi Electric, and NEC.
Within the video below, I do technical analysis on Nokia and tell you where I think this market is headed.
nokia renesas modemby: Dan Williams
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