Analysis: Nokia and Marvell partnership to develop 5G RAN silicon technology + other Nokia moves
Nokia has teamed up with semiconductor company Marvell Technology Group Ltd to develop customized 5G radio access system-on-chip leveraging its ReefShark technology. The alliance underscores Nokia’s commitment to deliver cost-effective and automated 5G network operations, especially at a time when it is aiming to walk the extra mile to revive its faltering 5G business.
As part of the agreement, Marvell Technology’s multi-core Radio Access Technology applications will be incorporated in Nokia’s AirScale RAN product line with its 5G-backed ReefShark portfolio. Equipped with customized ARM-architecture-based processor chips, this potential breakthrough innovation aims to deliver a best-in-class customer experience with reduced power consumption and enhanced performance and capacity.
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Tommi Uitto, President of Mobile Networks at Nokia, said:
“This important announcement highlights our continued commitment to expanding the variety and utilization of ReefShark chipsets in our portfolio. This ensures that our 5G solutions are equipped to deliver best-in-class performance to our customers. As service providers continue to evolve their 5G plans and support growing traffic and new vertical services, the infrastructure and components must evolve rapidly. Adopting the latest advancements in silicon technology is a critical step to better serve our customers’ needs.”
“5G networks need to support billions of devices and machines, and this massive increase in volume and scale means that existing infrastructure and components must evolve rapidly, adopting technologies and techniques to enable to deploy 5G networks quickly, added Uitto.”
(Image credit: Nokia)
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Other Nokia Initiatives:
- Nokia also agreed to a partnership with Intel on programs to accelerate its 5G development. Intel’s new Atom chip is targeted at base stations. Nokia will ship Intel Atom-powered variants of its 5G AirScale radio access technology. The company will also use Intel’s second generation Xeon scalable processor in its AirFrame data center kit, allowing for common architecture from the cloud to the edge of 5G networks.
- Nokia said it needed several partnerships to enable it support and achieve its goals for 5G.
- Nokia will acquire optical networking technology provider Elenion. Nokia said that adding Elenion will broaden its addressable market and unlock some cost benefits.
- Nokia took a $561 million R&D loan which was signed with the European Investment Bank (EIB) in August 2018, but was only disbursed last month. The loan has an average maturity of about five years after disbursement according to Reuters. A Nokia representative said the company would use the loan to further accelerate its research and development of 5G technology
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Analysis by Zacks Equity Research:
Nokia has long struggled to undertake additional investments related to its 5G powered ReefShark SoCs. These SoCs are best known to leverage a single computer chip to operate an entire system. Unfortunately, its inability to develop ReefShark portfolio has hindered its cost-efficiency feature, compromising its profitability to rivals like Ericsson ERIC, which spends hefty amounts on R&D. Dearth of resources and geared up 5G spending cycle have also put Nokia at the risk of losing out on upcoming commercial launches.
The latest collaboration comes as a savior for the Finnish company to cater new vertical markets especially in the face of burgeoning network traffic and dynamic 5G plans. Dubbed as a key partnership, it is expected to reduce Nokia’s technical disparities and address the complex requirements of 5G NSA, SA, NR specifications for future 5G network deployments.
Nokia’s gross margin was negatively impacted by a high cost level associated with its first generation 5G products, product mix and profitability challenges in China. Despite a 4.2% rise in revenues in third-quarter 2019, the performance was marred by pricing pressure in early 5G deals and temporary capital expenditure constraints in North America related to the proposed merger of T-Mobile US and Sprint. This was followed by its decision to suspend dividend payments and slash guidance for 2020. The company has also decided to retrench about 180 employees in order to trim operating costs.
It remains to be seen whether Nokia will be able to script a turnaround amid a challenging macroeconomic environment and geopolitical uncertainties.
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About Marvell:
Marvell first revolutionized the digital storage industry by moving information at speeds never thought possible. Today, that same breakthrough innovation remains at the heart of the company’s storage, processing, networking, security and connectivity solutions. With leading intellectual property and deep system-level knowledge, Marvell’s infrastructure semiconductor solutions continue to transform the enterprise, cloud, automotive, industrial, and consumer markets. To learn more, visit: https://www.marvell.com/
About Nokia:
We create the technology to connect the world. Only Nokia offers a comprehensive portfolio of network equipment, software, services and licensing opportunities across the globe. With our commitment to innovation, driven by the award-winning Nokia Bell Labs, we are a leader in the development and deployment of 5G networks.
Our communications service provider customers support more than 6.1 billion subscriptions with our radio networks, and our enterprise customers have deployed over 1,000 industrial networks worldwide. Adhering to the highest ethical standards, we transform how people live, work and communicate. For our latest updates, please visit us online www.nokia.com and follow us on Twitter @nokia.
Media Inquiries:
Nokia Communications
Phone: +358 10 448 4900
Email: [email protected]
Marvell Communications
Phone: +1 408 222 8966
Email: [email protected]
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References:
https://www.zacks.com/stock/news/797965/can-nokia-revive-its-5g-business-with-marvell-partnership
https://www.techradar.com/news/nokia-secures-5g-chip-partnerships-with-intel-and-marvell