Nokia Corp. is in advanced discussions to purchase CDMA EV-DO phones from the phone-making subsidiary of Korean CDMA carrier SK Telecom, according to a report from Reuters.
A Nokia spokesman said the company has made no such announcement and is “unable to comment on rumors.” SK Teletech, SK Telecom’s handset subsidiary, did not return a request for comment.
If Nokia does sign a deal with SK Teletech it could mark a change in strategy for the world’s No. 1 handset vendor. Nokia has long refused to outsource the development and manufacture of its phones, unlike most of the rest of the handset market. In CDMA specifically, Nokia has used chips from Texas Instruments and STMicroelectronics rather than purchase CDMA chips from Qualcomm Inc. If Nokia does sign an agreement to purchase EV-DO phones from SK Teletech-which uses Qualcomm chips, according to reports-Nokia would somewhat reverse its long-standing aversion to Qualcomm.
Indeed, Nokia has apparently hinted at the softening of its stance to industry analysts.
“Nokia is now more amenable to pursuing alternative chipset strategies than it has been in the past,” wrote investment banking firm Lehman Brothers in a March 7 note to investors. “(Nokia) management suggested that it is free to pursue a range of options to bring (EV)-DO models to market. These include using ODMs (original design manufacturers), purchasing chipsets from Qualcomm, and perhaps from third-party vendors. Management reiterated its long-term commitment to internal chipset development.”
Nokia, however, said its strategy has remained unchanged.
“At this point using our chipset has been a good decision. That’s not to say that … we would ever rule out anything if it made business sense,” said Nokia spokesman Keith Nowak. “If it makes business sense for us to ODM a product … than we would ODM a product.”
Nowak said Nokia outsources the manufacture of around 20 percent to 25 percent of its phone components. He said the company rarely uses phones from ODM suppliers like SK Teletech, but it has done so in the past with phones for the Korean market. Nowak declined to speculate on whether Nokia would use more ODM products in the future.
“We would always do what makes business sense,” he said.
Nokia has recently managed to score deals with CDMA carriers like Verizon Wireless and Sprint PCS to sell its phones. And at the recent CTIA trade show in New Orleans, Nokia showed off several new CDMA 1xRTT products. However, both Verizon and Sprint are rapidly moving to EV-DO networks, and Nokia has yet to release EV-DO phones.
In other Nokia news, the company announced it will build a mobile-phone factory in Reynosa, Mexico, to meet growing demand in Latin America. Nokia currently operates nine factories across the globe.
