Nokia Backs Out of CDMA JV with Sanyo

Staff Reporter -- 6/22/2006

Mobile phone giant Nokia has scrapped plans to team up with Sanyo to form a CDMA device company, and will ramp down its own CDMA R&D and manufacturing by April 2007.

Expressing a loss in confidence in the profitability of CDMA technology, which competes with the GSM standard, Nokia today said that the proposed joint venture with Sanyo is "not in the best interests of Nokia's long-term success."

"We feel it would not be in our best interests to make an agreement that proved to be less beneficial than originally anticipated," Kai Oistamo, Nokia's executive VP of mobile phones, said in a statement. "After exploring all available opportunities and making every effort to create a sustainable CDMA business, this is our only viable option."

Nokia now intends only to selectively participate in key CDMA markets, with special focus on North America, and plans to ramp down its own CDMA R&D and manufacturing in the coming months.

The company added that it has plans for a $188.5 million restructuring in Q3 to leverage its existing CDMA product development infrastructure and assets in more profitable parts of the business. Nokia gave no further details of the restructuring plans.

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