Tuesday, February 14, 2006

Sanyo, Nokia in Mobile Phone Joint Venture

More news from Nokia at 3GSM. TechNewsWorld reports that Nokia is creating a joint venture with Sanyo "to better reach key markets, especially the United States." The joint venture "would be largely separate and have offices in San Diego and in Japan," and "will focus on making and selling mobile phones using the Code-Division Multiple Access (CDMA) standard."

The partnership, which is expected to commence in Q3, "will aim to ramp production up to about 35 million handsets per year over time."

Both companies have struggled in the U.S. and "Sanyo brings its own CDMA expertise to the partnership, including existing supply deals with major wireless network carriers in the U.S. and Japan."

David Kerr at Strategy Analytics guessed "one strategy of the venture may be to attack the market that style-conscious consumers like Motorola has done so well with by selling the Razr phone." He said, "The device makers that let carriers maximize their revenue stream will be the favored ones going forward. They will clearly go after the mid to high-market with this venture, which is exactly where Motorola has been the most successful."

Rob Enderle at the Enderle Group noted Nokia excelled at "mass customization, with Nokia churning out phones that users can make their own by applying changeable skins."

At TheStreet.com, Ovum analyst Roger Entner said, "Looks like they are addressing the weakest spot in the company."

Noting Nokia's unwillingness to cater to network operators, Entner said, "Compromises don't often work. I think Nokia realizes it needs to be accommodating, but it's only a matter of time until the JV gets dissolved."

The article notes that "Sanyo is a favorite phone supplier to Sprint, and analysts say the joint venture will help Nokia offer EV-DO phones to Verizon Wireless.

American Technology Research analyst Albert Lin wrote in a research note that the "new business will have about 3,500 employees and Nokia is expected to cut 250 workers as part of the combination."