Sanyo's mobile division may be flogged off
Result of Nokia JV fall-out
By Tony Dennis: Tuesday 17 April 2007, 12:40
AS NEWS that Sanyo has appointed Golman Sachs to sell its semiconductor business got out, rumours are also spreading that the company's mobile phone division may be up for grabs, too. One of the factors behind the suggestion that the handset division might be sold off is the very public failure of an intended joint venture with Nokia to sell cdmaOne phones.
Ironically, the relationship between the two handset vendors – announced on Valentine's day 2006, had gone sour by late June. Nokia's excuse was that, "In addition to an already financially prohibitive CDMA ecosystem in general, recent developments may indicate that the CDMA emerging markets business case is looking more challenging. "
There was intense Press speculation at the time that the terms set down by Qualcomm for making cdmaOne and CDMA2000 handsets were far too onerous for Nokia to stomach.
Qualcomm put out an immediate denial. Steve Altman, Qualcomm president, said, "As far as news articles reporting or implying that Qualcomm's licensing terms resulted in the failure of Nokia to complete its previously announced joint venture with Sanyo, these are simply untrue.
The joint venture company was planning to operate under Sanyo's existing CDMA license agreement with Qualcomm, and no changes to the existing license agreement were required or requested.
The company added that, "The CDMA2000 handset business is highly competitive with participation from many capable manufacturers of all sizes around the world due in large measure to Qualcomm's widespread licensing and multi-tiered supply of enabling chipsets and software."
That doesn't seem to have helped Sanyo very much. According to Strategy Analytics - LG, Samsung and Motorola are the leading suppliers of CDMA handsets worldwide, not Sanyo.
So Sanyo has been only mildly successful in the cdmaOne world and its efforts to crack the European market haven't appeared to go much better. For example, it produced a W-CDMA handset, the S750, for Orange using Qualcomm chips. It's faded away since.
That just leaves Sanyo's home market, Japan, where it recently landed a deal to supply KDDI with handsets for the USA market. Better than nothing.
However, the CDG's [CDMA industry body] reaction to the failure of the Sanyo/Nokia joint venture was very interesting. Whilst pointing out that there were at the time some 50 different vendors offering over 1,250 devices for CDMA2000, it added, "In this highly competitive market, consolidation is expected."
And it appears that another victim of that consolidation (after Siemens) may well be Sanyo. µ
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