Nokia calls Sanyo into phone alliance

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Nokia and Sanyo have announced a joint venture to make mobile phone handsets, in a deal the firms anticipate will make $256 million within two years.

The companies plan to make handsets based on the CDMA2000 standard, the main format used in the US, and also target sales in Brazil, Russia, India and China, where mobile phone penetration is lower than in the US, Japan and other parts of Europe.

Operations are due to begin in July in Osaka, Western Japan, and San Diego, California.

The collaboration aims to exploit Nokia’s dominance in the affordable handset market, combined with Sanyo’s 3G Internet and media download technology. This approach is intended to increase demand for more technically advanced phones in a near-saturated market.

The venture plans to sell 35 million handsets in the first year, Takenori Ugari, the president of Sanyo's mobile-phone business, said at a news conference in Tokyo today.