Sanyo to Exit Cell Phone Business?

Sanyo has decided to sell its mobile phone business as part of its effort to improve group-wide profitability, with an agreement expected by the end of the year, according to a web report on Saturday by public broadcaster NHK. Sanyo is said to be negotiating separately with Sharp and Kyocera according to this article on The Japan Times. The exit rumor surfaced late last year.

Sharp and Kyocera are believed to be interested in Sanyo’s technology as well as its overseas sales networks, but Sanyo and the two companies remain far apart on various conditions, including the price, according to the sources. Sanyo is considering advancing negotiations by putting the sale out to tender, they added.

Also noted via Reuters:

Sanyo now expects to sell about 11 million units of mobile phones in the current business year to March 2008, down from its initial estimates of 12.5-12.6 million. Sanyo spokesman Akihiko Oiwa denied the NHK report, saying the company is exploring all possible measures to strengthen its mobile phone operations.

Sanyo, the world’s largest rechargeable battery maker competing with Sony, last month posted a 72% fall in quarterly operating profit, hit by sluggish mobile phone sales and higher raw materials prices. Sanyo posted a net loss for the past three business years, hit by sharp price falls, hefty restructuring costs and an earthquake damage to its semiconductor plant.

While the company had come close to tie-up with Nokia last year, it was not to be. Sanyo has already decided to sell their retail sales channel and we would not be surprised to see a some kind of deal for the handset division in the coming months as well. As we had speculated in November 2006 “perhaps a merger would be a much more likely scenerio”, it worked for Sony-Ericsson — Hello Motorola?!?