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Nokia revises chipset strategy

Finnish vendor Nokia introduced a licensing and multisourcing model for its chipset strategy on Wednesday, discontinuing parts of its own chipset development operations and increasing its reliance on third parties.

Nokia said the move would allow it to focus on its core competence in modem technology and invest in R&D areas besides radio technology, such as in software to power internet services.

The new strategy will see Nokia broaden its pool of chipset suppliers and make use of external technologies to support its products. The company is already working with four chipset suppliers: Texas Instruments continues as a broad scope supplier across all protocols; Broadcom as a supplier in EDGE; Infineon as a supplier in GSM; and STMicroelectronics as a supplier in 3G.

Nokia will continue to develop its modem technology, which includes protocol software and related digital design for WCDMA/GSM and its evolution. Nokia will then license this modem technology to its chipset manufacturers.

But the move will come as a further blow to Qualcomm, which is already reeling after the Bush administration let stand the US International Trade Commission (ITC) order barring the importation of Qualcomm chips and phones containing those chips that infringe a Broadcom patent.

The ITC had ruled on the ban in June, after finding that Qualcomm’s cellular baseband chips infringe five claims of one of Broadcom’s US patents.

“This is a pragmatic move in the face of an increasingly complex technology environment,” said Niklas Savander, executive vice president, Nokia Technology Platforms. “Companies in this industry need to focus on areas where they can add value and partner with others where it makes sense. We believe that our renewed strategy will allow us to concentrate on developing core chipset technologies, while increasing our R&D efficiencies and improving our agility in a fast-moving marketplace.”

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