Date: 29/09/2009

Kyocera is strategically investing in sales and divesting its Indian R&D resources

Japan based Kyocera, a typical electronics company with its presence in passive-components and semiconductors to telecom and wireless is looking at India in little different prospect than the other similar companies.
It has announced that, Indian leading engineering services firm Mindtree has agreed to buy its Indian R&D arm based in Bangalore called Kyocera Wireless (India) Pvt. Ltd.

Kyocera release states, The sale follows Kyocera's 2008 acquisition of the global mobile handset business of Sanyo Electric Co., Ltd., in which Kyocera gained approximately 1,700 highly skilled wireless engineers. In April, Kyocera continued the integration of the former Sanyo team by announcing a global reorganization of its telecommunication equipment business unit, which included the consolidation of wireless engineering efforts in Yokohama, Japan; Daito, Japan; and San Diego, California.

Under these circumstances, the sale of KWI further improves Kyocera's cost structure while adding flexibility to its engineering efforts. As far as software development is concerned, Kyocera will share its engineering platform among the group by centralizing core technologies in Japan and efficiently outsourcing peripheral technologies as appropriate. MindTree will become a strategic vendor for Kyocera, providing high-quality engineering resources on a cost-effective, as-needed basis. All of KWI's approximately 600 regular employees will be transferred to MindTree.

Nearly a month ago, Kyocera has opened a new sales office at Gurgaon, India to expand its operations in this emerging market.
Kyocera had stated "As one of the markets in Asia on which Kyocera has placed strategic importance, KYOCERA Asia Pacific India Private Limited (KAPI) will be able to aggressively develop its sales activities in India. The new company will begin with sales of cutting tools, and subsequently progress with further sales of other Kyocera components."
Moves such as these indicate Kyocera see more R&D service providers in India who can manage and provide better R&D services rather than using and maintaining its own team.

This is a little different strategy from other semiconductor and electronics engineering companies who invest in India both in R&D as well as sales.