According to the Nikkei, via Reuters, Kyocera and Sanyo are close to inking a deal that would merge the device makers into the world’s seventh largest mobile phone manufacturer. The business daily stated Kyocera aims to buy Sanyo’s mobile phone operations for about 50 billion yen ($435 million), Sanyo expects to sell about 11 million units in the current business year to March 2008, down from its initial estimates of 12.5-12.6 million. Both Kyocera and Sanyo said in separate statements that nothing has been decided.
The on-going saga should come as no surprise for those who have been following this story over the last 18 months. The companies announced a deal during 3GSM in Feb. 2006 only to have it called-off a few months later. As we had mentioned in the WWJ newsletter – Year of the Pig Shaping up as Golden – under the “Handset maker shake-down, dust-up and consolidation” section:
We expect 2007 will see more consolidation among Japanese device makers as they hit 2006 fiscal year-end (March 2007) and try to figure out what to do about all the red ink. This market cannot really hope to continue supporting 12 handset makers – especially in the face of increasing entry competition from foreign makers – unless and until they start selling their lovingly hand-crafted high-end models overseas as well as domestically – and band together to achieve some economy of scale.
Still have to wonder if Kyocera has managed to find a strong third player, ala NEC, Panasonic and Texas Instruments, to make things really interesting.. Hello Moto?!?