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Kyocera To Acquire Sanyo's Phone Business |
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Written by Adam Gosling
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Wednesday, 23 January 2008 |
Perhaps April Fool's day was not the most auspicious time to conclude
the acquisition of Sanyo's mobile phone business, but Kyocera's
decision is being applauded by independent market research firm,
Strategy Analytics.
The researcher says the acquisition will give Kyocera "important scale" but that the company will face the
"formidable challenge" of leveraging Sanyo’s resources to drive growth in
important 3G product segments.
Under terms of the agreement, Kyocera acquires a comprehensive set of
assets from the troubled Sanyo corporation buying up some patents along
with its R&D, design, materials procurement, manufacture, sales and
marketing assets relating to CDMA handsets; PHS handsets; PHS base
stations; and wireless communications systems.
The acquisition is forecasted to grow worldwide annual revenues from
Kyocera’s global telecommunications equipment business to approximately
US$3.7 billion.
"This transaction will yield great synergies and economies of scale in
areas such as technology portfolios, R&D, procurement, design,
marketing and sales,” said Makoto Kawamura, president of Kyocera
Corporation, the group's global parent. “Furthermore, the Kyocera and
SANYO product portfolios are highly complementary, and will allow us to
offer a broader lineup of handsets and data devices to all of our
carrier customers.”
Kyocera will pay cash, for the mobile phone business, but the final
figure won't be known until after April 1, 2008 as it is based on the
unit’s total business value (approximately US$467 million) before
adding and subtracting cash on hand and interest etc. The final price
is expected to be about US$375 million.
Neil Mawston, Associate Director at Strategy Analytics, said, “The
combined entity of Sanyo Electric and Kyocera Corp registered a global
market share of 10 percent in CDMA handset shipments during the third
quarter of 2007. This gives them greater scale-economies. Kyocera-Sanyo
is now the clear number four vendor in this market and they are
breathing down the necks of LG, Motorola and Samsung in the three
places above.”
Chris Ambrosio, Director at Strategy Analytics, added, “This
acquisition gives Kyocera important design resources and high-tier CDMA
products that it failed to develop on its own. Whether Kyocera can
integrate Sanyo’s resources and churn out a compelling line of new
products will be the acid-test for 2008.
"In W-CDMA handsets, in
particular, Sanyo has so far largely failed to penetrate the global
market. Even with the acquisition, we expect it will be a monumental
task for Kyocera to move into that fiercely-competitive 3G market in
the future,” he said.
With the imminent closure of Telstra's network there will be no CDMA infrastructure left in the Australian market.
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