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Kyocera Buys Sanyo Mobile Phone Business

Posted on: Tuesday, 22 January 2008, 06:00 CST

Kyocera is to pay up to JPY 50bn ($467m) for Sanyo Electric's mobile phone business in a long-anticipated merger among the dozen players fighting for a share of the Japanese market.

The deal is designed to boost Kyocera's telecommunications equipment business to JPY 400bn ($3.7bn) and be an effective player on the international market, where it will be the sixth largest handset maker, though with a tiny share of below 2%.

Japan's handset makers have failed to emulate the success of the country's consumer electrics industry on world market because each carrier uses different technologies such as W-CDMA, cdma2000, and iMode, so it has been difficult to generate the economies of scale that would make them competitive internationally. Only Sony has been able to prosper in the business by entering a 50-50 partnership with Ericsson.

Sanyo has been touting its loss-making handset business around for some time and it is selling Kyocera assets including CDMA handsets, PHS handsets, PHS base stations and wireless communications systems ,as well as a range of related technologies, intellectual property, and patents.

Kyocera president Makoto Kawamura said the two companies' product portfolios are complementary, and will enable it to offer a broader range of handsets and data devices to its carrier customers.

Kyocera said it plans to offer continued employment to all 2,000 affected Sanyo employees.

The final cash price will be determined by April 1 and will range between JPY 40bn ($375m) and JPY 50bn ($467m).

Source: Datamonitor

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