Nokia and Sanyo abandon plan to merge their CDMA units

Nokia and Sanyo have canceled plans to merge their CDMA handset divisions, the two companies said Thursday.

Nokia and Sanyo Electric Co. have canceled plans to merge their CDMA (Code Division Multiple Access) handset divisions, the two companies said Thursday.

The companies said they are calling off the merger plan after extensive analysis concluded that it is more beneficial to pursue other options individually for the respective CDMA handset businesses.

They first announced the merger plan in February of this year, with a view to capturing the top share of the global CDMA market. The companies had complementary product lines: Sanyo had been selling mainly mid- to high-end handsets in the U.S. and Japan, while Nokia had been concentrating its CDMA efforts in developing markets.

The combined company would have been a much stronger competitor to market leaders Samsung Electronics Co. and LG Electronics. Nokia and Sanyo would have had a combined market share of 20.6 percent, based on 2005 estimates, making it a tie with Samsung.

The companies had promised a definitive agreement in the second quarter, which ends in about a week, and the new company was supposed to start operating in the third quarter.

Now that Nokia and Sanyo have abandoned the merger, they will announce their future plans in due course, they said in a statement.

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