SAN DIEGO--Qualcomm Inc. today announced it has agreed to sell its terrestrial wireless phone business to Kyocera Corp. of Japan. As part of the agreement, Kyocera will purchase a majority of its chip sets and software for Code Division Multiple Access (CDMA) phones from Qualcomm during a five-year period.
The two companies said the transaction is expected to be completed by the end of February, and they did not disclose the financial terms of the agreement. Kyocera will gain Qualcomm's CDMA consumer phone unit, including its phone inventory, manufacturing equipment, and customer commitments.
Under the agreement, Qualcomm will form a new subsidiary with a "significant" number of employees from its consumer products operation. Through a strategic alliance, Kyocera will contract services from these employees to support the company's phone business for up to three years on a cost-plus basis.
Officials at Kyocera said the agreement is a major breakthrough for the company's wireless phone operation in North America, where it has just recently begun to market wireless telephones.
"Kyocera will now have a comprehensive global infrastructure for producing and delivering CDMA handsets -- from world-leading R&D and production, to sales, marketing and support," declared Yasuo Nishiguchi, president of Kyocera in Kyoto, Japan. "With this North American business base, and our existing operations in Japan and South Korea, our wireless handset business covers the three largest regional markets for CDMA equipment. We are ready to provide handsets to any CDMA carrier in the world."