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Sanyo, Nokia in Mobile Phone Joint Venture

Posted on: Tuesday, 14 February 2006, 03:03 CST

TOKYO - Japan's Sanyo Electric Co. and Finland's Nokia Corp. announced a preliminary agreement on Tuesday to form a joint venture in the mobile phone business.

The companies said they plan to announce a final agreement on the partnership in CDMA mobile phone technology in the second quarter of this year.

The agreement calls for the companies to form a joint venture that will have major operations in San Diego and the western Japanese cities of Osaka and Tottori, they said.

Sanyo would transfer the business that makes phones based on the CDMA2000 technology to the venture to help keep down its own development costs, Japanese media reports said Tuesday.

For Nokia, the deal would help it step up its name recognition in the Japanese mobile phone market, the reports said.

CDMA2000 is used in the United States by Verizon Wireless and Sprint Nextel Corp. and overseas in South Korea and other countries.

Nokia is the world's leading mobile phone manufacturer - holding a 32 percent share of the market - but it currently has only one model available in Japan, the Asahi newspaper said.

Nokia's net sales grew 16 percent in 2005 to euro34.2 billion (US$40.7 billion) and net profit was up 13 percent at euro3.6 billion (US$4.29 billion). Sales of mobile devices in 2005 grew 28 percent, reaching a record 265 million units.

Sanyo has struggled in recent years and is projecting a 233 billion yen (US$1.98 billion; euro1.67 billion) loss in the current fiscal year, which ends March 31. It expects to manufacture 12.5 million mobile phones during the fiscal year, company spokesman Atsushi Watanabe said.

Source: Associated Press/AP Online

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