Nokia and Sanyo are calling it quits. The companies have decided not to move forward with a planned joint venture that would have focused on the CDMA handset market. Separately, Nokia and Siemens announced initial executive appointments for their planned joint venture, Nokia Siemens Networks.
Nokia and Sanyo announced their plan to form the joint venture in February, but have now decided to pull out of the JV, citing increased competition in the CDMA market.
"Recent developments may indicate that the CDMA emerging markets business case is looking more challenging," Nokia said in a prepared statement. The company also no longer views the JV as a viable business option. "Nokia decided not to pursue its earlier plan as it concluded the terms and conditions of the proposed partnership were not satisfactory and in the best interests of Nokia's long-term success," Nokia said.
Lehman Brothers analysts echoed Nokia's concerns in a research note saying, "We believe the negotiations have proven challenging with Sanyo, with Sanyo itself currently undergoing a substantial restructuring."
These revelations also prompted Nokia to ramp down its CDMA handset business. The handset manufacturer will only focus on key CDMA markets, such as North America.
In other Nokia news, the company's planned joint venture with Siemens is moving forward. Nokia Siemens Networks, which was announced earlier this week, plans to be operational by Jan. 1, 2007.
Several executive appointments were announced today. Mika Vehviainen, who currently serves as senior vice president and general manager of Nokia's Core Networks division, will serve as COO. Karl-Christoph Caselitz, Siemens president of Mobile Networks, has stepped in as chief market operations officer, while Peter Schonhofer will join the JV as CFO. Schonhofer comes to the new entity from Siemens Austria where he served as a member of the executive board.
Nokia Siemens Networks is being formed through the merger of Nokia and Siemens' networks businesses.