Sanyo, Nokia Plan Joint Phone Venture

Japan’s Sanyo Electric Co. and Finland’s Nokia Corp. announced Tuesday that they would combine some of their cellphone operations into a joint venture with major operations in San Diego.

The new entity will have 3,500 employees, Nokia said; more than 200 jobs will be cut because of the merger.

Apart from San Diego, the venture will have major operations in the Japanese cities of Osaka and Tottori.

The companies did not say where the new entity’s headquarters would be.

At a news conference in Tokyo, the companies said they would sign a deal in the second quarter and that the new business would start operations in the third quarter.

Together they would control about 20% of the world’s market for cellphones that use CDMA technology, rivaling current leader Samsung Electronics Co. of South Korea, they said.

CDMA, which stands for “code division multiple access,” is used in the United States by Verizon Wireless and Sprint Nextel Corp., as well as in Japan, India, China and South Korea.

Nokia estimates that CDMA phones account for 20% of the worldwide handset market, with shipments this year likely to reach 150 million units and $28 billion in value. In other markets, including Europe, the Middle East and Africa, GSM, or Global System for Mobile communications, is the dominant standard.

Sanyo hopes the partnership will boost its flagging fortunes. The Osaka-based company is projecting a $2-billion loss in the fiscal year ending March 31 and has announced a major overhaul by cutting jobs, reducing factory space and dropping some businesses.

For its part, Nokia, which controls 33% of the global cellphone market but hardly sells any handsets in Japan, sees the Sanyo partnership as an opportunity to gain a better foothold there, Senior Vice President Timo Ihamuotila said by phone from New York.

Shares of Sanyo rose 13 cents Tuesday to $12.23. Nokia gained 57 cents to $18.52.