Nokia has announced a partnership with chipmaker Marvell to help resolve its 5G problems, which have done serious damage to the company’s market value. And if Nokia doesn’t turn around its 5G performance soon, it could fall even further behind its competition, and face more stock market uncertainty.
In the current scenario, Nokia must be seen to be taking action, whether it comes in the shape of changing CEOs, or hiring new chipmakers. And only time will tell if this will help to turn the company around.
Marvell the chipmaker
"We believe the key problem area for Nokia has been the development of the 5G baseband."
Barclays report.
Marvell is a US chipmaker that made nearly $3 billion in revenue last year. And the company has been hired to work on Nokia’s new range of system-on-a-chip and infrastructure processors.
The chipsets that come out of this partnership will go into several parts of Nokia's Airscale-branded radio access technology. And Nokia is hoping that this collaboration will lead to a reduction in unit size and power consumption, as well as improvements in capacity and overall performance.
Marvell's chipsets will eventually replace the field programmable gate arrays (FPGAs) that Nokia originally chose for its 5G products. These were an expensive option that doesn’t appear to have paid off.
"We believe the key problem area for Nokia has been the development of the 5G baseband, due to both Nokia's internal development issues and Intel's 10nm [10-nanometer] delays," said Barclays in a research report.
Nokia’s 5G performance
Last year was not a strong year for Nokia, as the company pressed pause on dividend payments and reduced its targets. As a result, Nokia's market value plummeted by €6 billion ($6.7 billion) and investors have looked less favourably on the Finnish multinational.
However, it’s reassuring to see Nokia taking steps to improve its 5G offering. And investors and partners will be watching closely, as the FPGAs are phased out and replaced with Marvell’s chipsets.
With a new CEO starting in August, a new 5G strategy, and a new supplier, Nokia is hoping to address its decline in 2020.
