Nokia, Sanyo Join Together In Mobile Handset Venture

Struggling Japanese electronics maker Sanyo and Finnish mobile telecommunications Nokia said Feb. 13 they were in talks to set up a global joint venture in third-generation (3G) mobile phones. The full details have yet to be decided but the new company would be operated with a "spirit of partnership," the two companies said in a joint statement, without revealing ownership ratios or other financial details. The main functions will be spread between two sites in Japan and San Diego.

The two companies aim to sign a final accord in the second quarter of 2006 and start operations in the third quarter, integrating their cellphone operations in the CDMA standard, they said. CDMA is the dominant mobile technology in North America and used by Japan's second-largest mobile operator KDDI for its main "au" brand of mobile services.

Sanyo is accelerating 14,000 planned job cuts and pulling out of loss-making lines due to a price war in mobile telephones and digital home appliances. "Looking at the situation of Japanese mobile phone handset makers, we thought that it was inevitable to tie-up with a major player in the world which produces some 50 million to 60 million handsets a year," said Takenori Ugari, who heads Sanyo's telecom division. In the first year, the venture aimed to achieve output of 35 million handsets or above, and ultimately reach 50 million, he said.

As well as CDMA, Nokia also makes handsets based on competing technology such as UMTS (Universal Mobile Telecommunications Service). Sanyo meanwhile said it would independently continue making 3G handsets supporting the W-CDMA standard used by Japanese industry leader NTT DoCoMo and Vodafone of Britain.

As well as cutting cellphone development costs through the deal with Nokia, Sanyo could enhance its battery business by joining hands with the world's largest mobile phone company. Sanyo has a 50% share of the global market for cellphone batteries.

Copyright Agence France-Presse, 2006

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