Canon Inc., a unit of Japanese electronics maker Canon Group Inc., announced on Tuesday that it is in discussions to buy the smartphone maker ROK Holdings Ltd., a move that could be seen as a further sign of how it plans to shift its focus away from smartphones and towards cloud-based services.
In a statement, Canon said it is “excited to join forces with ROK to expand our offerings, including our cloud-computing business and our cloud platform, which will provide a unique platform for our enterprise customers to accelerate their cloud-enabled business.”
The purchase is a step forward in ROK’s evolution from an electronics company to a cloud-focused company, where its products are increasingly being used in cloud services such as Microsoft Azure and Google’s Cloud Platform, according to people familiar with the matter.
ROK has long been focused on hardware and technology, but the company has seen its market share slip as consumers have increasingly moved to cloud services, where they can pay for cloud services without spending a dime on hardware.
Rok is the first company to formally announce its intent to acquire ROK, but it has not said if it will take over the company.
The ROK deal is likely to be a boon to ROK and its hardware partners.
Canon, which makes the Rok cameras, will now have a stable platform to use to build products, said the people, who asked not to be identified because the talks are private.
The deal is expected to be finalized by the end of March, the people said.ROK’s hardware has become increasingly popular among developers, with developers developing new applications and services on the hardware.
That has allowed Canon to move from developing software for its cameras to building products for its cloud service.
In November, the company unveiled its first product: a camera-to-camera messaging service called Canon Chat, which is built on ROK hardware.
Canon Chat is used to send photos to people who are connected to the cloud, and Canon says it will also help people share photos and videos between their devices.
The company will also have access to Rok’s cloud services for data analytics, the People’s Bank of China said in December.
Rok’s smartphone division has been the subject of speculation for several months, as a new cloud-powered device is being built, said a person familiar with Rok who asked to remain anonymous because the discussions are private, and who said the company had not made a formal announcement about the deal.
Roks smartphone division is a major focus for Canon, and there is no sign that the Roks cloud-connected smartphone division will disappear.
The people also said that the deal could include ROK shares, which are traded on the Tokyo Stock Exchange.
A person familiar said the deal is being valued at about $50 billion.