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27 2 04 Audiovox says that it has signed a non-binding letter of intent to
sell a controlling interest in the Company's wireless subsidiary, Audiovox
Communications to South Korea's Curitel Communications. Currently, Audiovox
owns 75% of ACC and Toshiba Corporation owns the remaining interest.
The terms of the transaction were not disclosed.
Philip Christopher, President and CEO of ACC said, "We welcome this
interest shown in our company and its management and recognize that
partnership with a strong manufacturer, such as Curitel, a major supplier of
handsets to ACC, will permit expansion of our product line and render us
very competitive."
Strategy Analytics says that it views handset maker Curitel's bid for a
controlling interest in Audiovox as a strong positive move for the Korean
manufacturer in its quest to establish a much clearer roadmap for its
wireless carrier partners. Audiovox has seen its market share fall from 9%
in 2000 to less than 3% in 2003, as delays and misaligned feature set
configurations sabotaged its ability to carve a profitable niche with its
sourced products.
Chris Ambrosio, Director of the Strategy Analytics Wireless Device
Service (WDS), states, "Working with Sharp, Toshiba, and Curitel, Audiovox
struggled to define its profit target niche through 2002 and 2003. Curitel
is likely to consolidate its product line within the Audiovox brand and make
a strong value statement to the entry-level market at Verizon. With
cameraphone expertise in its domestic Korean market and a willingness to
embrace differentiated form factors, Curitel has a clear value statement to
the high-end camera phone market. While Audiovox' brand value is flagging in
the US with low single-digit brand awareness among end users, a weak brand
is better than no brand at all. With this action, Curitel also gains an
established entry to Sprint PCS and, if properly positioned in a coordinated
sales message, Curitel can take a giant leap forward from where it would be
trying to break into the market on its own."
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