Nokia, Sanyo Team to Counter CDMA Rival Samsung

Online staff -- Electronic News, 2/14/2006

Nokia and Sanyo today announced an agreement to merge their respective CDMA mobile phones businesses into a new global company separate from the parent companies.

The joint venture seeks to achieve a number one position within the global CDMA mobile phone market currently held by Samsung.

"In addition to making possible the supply of even better products to our current customers, this new company will also lead to raising our position in the global market,” said Sanyo's President Toshimasa Iue, in a statement. "I am confident that integrating Nokia's strong brand with Sanyo's ability to meet the markets needs will lead to the building of a very strong partnership in the CDMA industry."

Added Olli-Pekka Kallasvuo, Nokia’s president and CEO: "We identified this new entity as the best way to create an attractive CDMA phone portfolio for our customers with the widest possible product offering at the high-end, mid-range and entry levels.  We estimate that the creation of this separate, associated company will provide Nokia with financial benefits from start. It also offers both parties timely access to R&D competencies that complement their own internal strategies."

Nokia brings its strength in entry-level and mid-range CDMA mobile phones and relationships with more than 60 CDMA carrier customers around the globe. Meanwhile, Sanyo has a leadership position in mid-range and high-end CDMA handsets and maintains strong relationships with CDMA operators in Japan and North America.

The new entity will operate as a partnership and have major operations in San Diego as well as Osaka and Tottori, Japan. The duo said relevant assets from both companies will be contributed or made available for the new entity, but did not release financial details. The companies also did not release a name for the new venture.

Final agreements are expected to be signed in Q2, with the new business expected to commence operations in the Q3.