Wednesday, 08 April 2020

Nokia partners with Intel for a 5G helping hand

by Harry Baldock, Total Telecom
Thursday 05 March 20

The Finnish giant is in a bit of a slump when it comes to the next generation technology and hopes its pairing with Intel will give it the boost it needs to catch up with rivals

It is no secret that Nokia has been having some trouble with 5G. In October last year, Nokia suspended its dividend and significantly lowered its financial expectations for 2020 and 2021 as a result of a weaker financial performance than anticipated.    At the time, CEO Rajeev Suri explained this lackluster performance as stemming from the materialisation of a number of risks…

It is no secret that Nokia has been having some trouble with 5G. In October last year, Nokia suspended its dividend and significantly lowered its financial expectations for 2020 and 2021 as a result of a weaker financial performance than anticipated. 
 
At the time, CEO Rajeev Suri explained this lackluster performance as stemming from the materialisation of a number of risks, including “a high cost level associated with our first generation 5G products; profitability challenges in China; pricing pressure in early 5G deals; and uncertainty related to the announced operator merger in North America.” Much has changed in five months – for one thing, the much anticipated merger of Sprint and T-Mobile, to which Suri is referring, has since been given the go ahead – but Nokia does not seem to have made significant progress when it comes to making up lost ground. 
 
In fact, Suri himself has announced that he is stepping down as CEO, to be replaced by veteran Pekka Lundmark in September.
 
Now, Nokia hopes to revitalise its approach to 5G with a new partnership with Intel. The two will be collaborating on silicon technology innovations, presumably to try and improve its ReefShark chipset’s data throughput and energy consumption.
 
“Implementing technology innovations from the core to the edge of the network is key to unlocking the full potential of 5G. Through our collaboration with Nokia, our broad portfolio of products and ASIC capabilities, we are showing the value that can be realized with a consistent, high-performance architecture across the intelligent 5G network,” said Dan Rodriguez, corporate vice president and general manager of Intel’s network platforms group.
 
This is not the first deal Nokia have announced this week, striking a similar with America semiconductor company Marvell yesterday. 
 
If Nokia really is seeking to change its chip strategy significantly in order to gain ground with 5G, these deals may not be the last we see in the near future.
 
 
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