LM Ericsson Telephone is set to announce the creation of a separate company for its Bluetooth business.
The new company, for which a name is yet to be announced, will start operations within months and will be based in Sweden, a spokesperson for Ericsson in the Netherlands confirmed.
Bluetooth, a wireless technology for connecting devices, is currently part of Ericsson's consumer division, which is being restructured because of slumping sales.
Ericsson has several Bluetooth research and development (R&D) centres in locations around the world. The facility in Sweden is seen as the birthplace of Bluetooth and is Ericsson's main location for Bluetooth development, the spokesperson said.
Personnel will not be affected by the separation of businesses.
"Staff will still be employed by Ericsson with the same benefits," the spokesperson said.