SoftBank announced its plans to withdraw from the development center in Silicon Valley, despite the initial plan of implementing joint development activities with Sprint.
In fact, this has already been a rumor among Japan’s industry insiders since about a month ago.
It all started when an anonymous tip from people involved in manufacturing came in on November 18, saying that the executives of SoftBank who were in Silicon Valley were returning back to Japan.
However, when asked about this to another people involved in manufacturing, some also said that the executives were going to Kansas City, where Sprint’s headquarters are located, instead of returning back to Japan.
As I continued to gather information, I discovered that Sprint’s new CEO, Marcelo Claure, wanted to move its R&D functions to Kansas City, where the headquarters are located, causing a split of opinions between Sprint and SoftBank.
From the perspective of CEO Marcelo, it makes more sense that he wants to bring together the headquarters and R&D center. However, from the standpoint of SoftBank, the synergy is generated between Sprint and SoftBank precisely because the R&D center is located in Silicon Valley, which is home to some of the cutting-edge Internet businesses, and SoftBank is turning thumbs down because there is no merit after moving to Kansas City, where nothing is there.
Even for SoftBank, they could not compromise on moving the R&D center from Silicon Valley.
On December 11, multiple sources in the industry gave evidence that it was the truth that its R&D center in Silicon Valley had been undergoing a review, and that the decision would be settled in the next two to three weeks and those who were involved had been already notified.
Taking a look back at the year since SoftBank has established its base in Silicon Valley, obviously the development of new devices has not been running smoothly.
In fact, looking at the line-up of newly released devices, there are mostly the devices that can be developed and procured within Japan, such as Sharp’s AQUOS Crystal and AQUOS Crystal X, and Sony’s Xperia Z3, without having a R&D center in Silicon Valley.
While the AQUOS Crystal, in particular, is a joint-procurement model in Japan and the U.S., the devices with different wireless features had to be made available in these countries, and there was a constraint to procure the exact duplicate unlike iPhone.
At the time of acquiring Sprint, although CEO Son used the synergy created by the joint procurement to get publicity, after all, the products for Japan should be developed specifically for the Japanese market and those for the U.S. should be developed specifically for the U.S. market, so that the users will increase the desire to buy it and in the result, the manufacturers become happy when it sells.
What’s more, considering the position of Sprint being ranked 3rd as close as possible to the 4th, my guess is that they had to develop products that stand out and appeal strongly to American users. It will become increasingly challenging to capture the hearts of the American users if they remain in pursuit of the procurement scale and think about the Japanese market on the one hand.
Some source says that in the days to come, the Japanese R&D team will play a central role in the device development.
After the failed attempts to acquire T-Mobile, CEO Son’s business expansion in the U.S. is indeed facing a major crossroads.