Dec. 6, 2006

Sprint Nextel just introduced Sanyo’s new M1 handset, a high-end multimedia phone with lots of onboard memory and a two-megapixel camera, for only $200 with a two-year contract.

Some believe that Sanyo's new phone may provide users with another device for enjoying Sprint Nextel’s video and music offerings.

However, it may also be the proverbial high note signaling big changes for both companies.

Sanyo is the world’s ninth-largest handset vendor. Last year, it announced a restructuring plan designed to significantly reduce ongoing financial losses.

The company also suggested it would abandon the mobile phone business. This refrain was underscored in various press accounts in November, when the Japanese daily newspaper Nihon Keizai reported that Sanyo plans to sell its mobile phone business.

Sanyo had no comment on the report.

While the company has a strong foothold in its native Japan, its global market share is only slightly better than 1 percent. Such a small market share is a typical characteristic of second-tier handset vendors beyond the top six players.

Sanyo was dealt a blow earlier in 2006 when a planned joint venture to deliver CDMA handsets to the U.S. market was cancelled by Nokia.

The company has supplied the bulk of Sprint Nextel’s CDMA mobile handsets, up to about 33 percent of the carrier’s portfolio. As a result, its fate is closely tied to the carrier’s recent, uneven performance.

Whether Sprint Nextel’s business has suffered from its handset offerings, which it has recently succeeded in expanding with several popular Motorola models, or whether Sanyo is paying the price for Sprint Nextel’s performance is a matter of speculation.

However, with Sanyo’s expressed interest in shedding its handset business, Sprint Nextel likely is looking at alternative sources.

At the same time, the M1 arguably represents the apex of the two companies’ cooperation to date.

It provides 1 gigabyte of internal memory, or storage for approximately 16 hours of music, and provides users with an external display and music controls, as well as text messaging, Bluetooth and GPS functions.

Source: RCR News