In what ways?
Motorola divested their semiconductor offerings a few years ago and even when they were in the business didnt show much interest in the memory business. Since then, they have continued to sharpen their focus on their various wireless offerings.
The handset market is becoming a larger part of Sandisk's business, but Motorola only owns 20% of that market. If you were Nokia, would you want your chief competitor to supply your flash cards/iNAND for your handsets?
The stake Motorola would take would be a minority financial investment in Sandisk. They're a cash rich company (so is Nokia, and they could do same), and right now, Sandisk needs additional cash for expansion. The alternative would be something akin to what Apple did with flash manufacturers, and advance purchase a big chunck. The Motorola stake wouldn't be significant enough for Nokia to worry about, and Nokia doesn't have that many other options right now anyway. The other main supplier is Samsung, and that's more of a competitor. The deal can be done with several of the major handset makers, and locks up supply agreements for stability and growth for both parties. It's in neither Sandisk's nor the phone manufacturer's interest to be caught with shortage or excess of cards, and by locking in agreements, they can better manage growth together. |
