Nokia released the news in July about a $200 million deal to sell its wireless modem business 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 employees to Renesas, the vast majority of which are based in Finland, India, the UK, and Denmark. Prices for wireless modems have plunged over the last several years amongst competition from Huawei and ZTE, both headquartered in 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 standard selling price for wireless broadband modems was about $38, down from $150 in just 3 years. A lot of mobile operators in Europe now give away wireless broadband modems, which are typically plug-in U.S.B. sticks, to draw new mobile broadband clients. The U.S.B. market has become a suprisingly low-margin business. Nokia has seemingly decided it is better to give full attention to more lucrative aspects of the business. A couple weeks ago, the European Commission said it had opened an enquiry into a grievance by Option, a Belgian maker of wireless modems, which testified that unidentified Chinese competitors were dumping wireless modems, or selling them for less than the expense of manufacturing, in Europe. This looks like it's just another occasion of the Communist Chinese using tax paying dollars to offer products below market cost effectively eliminating the competition. After 5 to 10 years of doing this, almost all of the competitors go out of business or like Nokia, start working on other things, and only then do the Chinese begin raising their prices once they have wiped out many of the competition. It's really a practice that G9 countries have asked China to quit. I do think what needs to occur is all countries need to start raising tariffs on Chinese products until they comply. Renesas Electronics is not a publically traded company but it is one of the world's largest semiconductor corporations. It had been formed in the 2010 merger of NEC Electronics and Renesas Technology, two chip makers that were ranked second and first in the world-wide market for microcontrollers, the chips that operate computer printers, microwave ovens, along with other relatively simple electronic products. Chips made 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. In the video below, I carry out technical analysis on Nokia and tell you where I think this market is going.

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