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Speculation is mounting in Japan tonight that Kyocera is in talks to either buy into or form a joint venture with struggling US communication Company Motorola. The speculation comes only months after the Japanese Phone Company said that it was not interested in Motorola.
Earlier this year Kyocera acquired Sanyo’s global mobile phone business and during the past few weeks the Company is believed to have opened up discussions on the possibility of merging the Motorola phone business into the new Kyocera division.
Sources in Japan have told ChannelNews that Kyocera believe that their manufacturing skills coupled with Motorola’s marketing skills will help them to create a “Powerful ” phone division to take on the likes of Samsung and LG who during the past few months have taken significant market share away from Motorola in the highly competitive US market.
Late last year Motorola admitted that it was exploring options for its troubled handset division, yet despite their frank and public admissions that there was trouble ahead, no one came forward with an offer to bail out the troubled US Company.
According to BusinessWeek the lack of acceptable bids has added renewed urgency to Motorola’s backup plan: an in-house revamp. Improved performance would help Motorola sell the division at a more attractive price later, spin off a higher-value asset, or even hang on to a revitalised handset maker.
According to Analysts, Motorola’s problems stem from them not being able to come up with a successor to the blockbuster Razr phone.
“It is in real danger of being overtaken” by LG Electronics, according to researcher Strategy Analytics.
Unlike Nokia, the Koreans are even strong on Motorola’s home turf. In the U.S., which accounts for 44% of its handset sales, Nokia has been losing ground, shedding its share by nearly two thirds in the last two years.
In contrast, Samsung and LG together sell about the same volume in the U.S. as Motorola. And while Motorola’s presence is collapsing outside the U.S., the Korean electronics giants are gaining share in both developed countries and emerging markets, thanks to stylish phones featuring touch-screens and multimedia features.
Indeed, it is not just Motorola that should be worrying about the Koreans. Although there’s no doubt Nokia, boasting 40.9% share, will rule the planet’s cell phone market for the foreseeable future, Samsung is narrowing the gap with the Finnish company. LG, until a year ago seen as a second-tier vendor, has leapfrogged Sony Ericsson this year to become the world’s fourth-largest handset maker. The Koreans are even well positioned to challenge Apple’s iPhone. “If 2007 was the year of the Europeans,” says a recent Strategy Analytics study, “then, due to LG and Samsung, 2008 is shaping up to be the year of the Koreans.”
