Nokia Corp. said Wednesday that in a 'pragmatic' move, it will discontinue a part of its internal chipset development to work more closely with outside developers, including a transfer of 200 of its employees to STMicroelectronics for third generation (3G) technology.

The world's largest supplier of handsets says it will continue to develop its own 'leading' modem technology - which allows digital devices to communicate using radio signals - and license it to chipset manufacturers. The company believes the strategy will let it focus on its core technology and improve efficiency.

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.

The company says it will now be working with four chipset suppliers, including STMicroelectronics. Texas Instruments will continue to be Nokia's main supplier of chips. Broadcom will supply its cellular basedband chip for EDGE mobile phones. Infineon Technologies for will be the GSM technology supplier.