OSAKA (Kyodo) Sanyo Electric Co. and Finland's Nokia Corp. will form a new global company as early as summer to develop and produce third-generation mobile phones, the two firms announced Tuesday.
The separate company will have major operations in Osaka and Tottori prefectures as well as in San Diego, they said.
The struggling Japanese electronics manufacturer and the world's biggest cell-phone maker are expected to sign a final agreement in the April-June quarter and begin operations in the July-September quarter.
The venture will help Sanyo save costs on advanced product development and boost its competitive edge in the global market with the Nokia brand, while it will allow Nokia to absorb Sanyo's expertise in third-generation product development.
Under the plan, Sanyo will transfer its business operations of CDMA 2000 3G cell phones to the joint venture. CDMA 2000 is the dominant format in North America.
Sanyo plans to keep its W-CDMA handset business, according to Sanyo officials. The W-CDMA standard is used by NTT DoCoMo Inc. and Vodafone K.K.
The two companies are negotiating the investment ratios, but it is likely Sanyo will have about a 50 percent stake in the new company, according to sources.
Sanyo has set the cell-phone business as one of the group's core businesses. It expects its global cell-phone sales for fiscal 2005 to reach about 12.5 million units.
The tieup may spur realignment among Japanese cell-phone makers facing deteriorating profits due to tough competition, industry watchers said.