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NEC, Casio, Hitachi to merge mobile phone ops

15 сентября 2009

NEC, Casio and Hitachi  said Monday that they have agreed to merge their mobile phone handset operations with the aim of taking over as Japan's No.1 handset maker and pushing into overseas markets.

The integration, which will take place in April 2010 via a new joint venture called NEC Casio Mobile Communications, would create the second-largest handset maker by shipments after Sharp Corp.

The merger is expected to cut development and production costs at the new entity by integrating current manufacturing and research and development operations.

The agreement comes amid growing pressure on Japanese mobile phone makers to regain momentum in the near-saturated domestic market and seek a growth in developing international markets such as China, where Sharp already sells several models to appeal to the masses.

"We should take a chance to expand our business overseas," said Akihito Otake, NEC's executive vice president, at a press conference.

By the fiscal year ending March 2013, the NEC-Casio-Hitachi alliance aims to sell 12 million handsets globally - 7 million in Japan and 5 million overseas - to grab a 23% market share in Japan and make it the biggest supplier at home.

A combined NEC-Casio-Hitachi operation would have had a domestic market share of about 20.2% as at the end of March, according to data from research firm BCN Inc., trailing Sharp's 21.8% share of Japan's huge but stagnating market for mobile phones.

For its overseas strategy, the new venture will focus on the U.S. market first, where Casio Hitachi Mobile Communications, a joint venture between Casio and Hitachi, already supplies the products to Verizon Wireless.

"We'll come up with high-end products because we can't compete with Nokia and Samsung" in low-end models, said Otake, referring to Finland's Nokia Corp., the world's largest mobile phone maker by sales, and South Korea's Samsung Electronics Co.

NEC Casio Mobile Communications will be led by NEC, which will own a 66% stake initially, with Casio and Hitachi holding 17.34% and 16.66%, respectively.

NEC and Casio will help the new entity to raise its capital by Y4 billion to Y5 billion by June 2010, allowing NEC to increase its stake to 70.74% and Casio to raise its ownership to 20%. As a result, Hitachi's stake will decrease to 9.26%.

"NEC will obviously want to strengthen its mobile business because they're focusing on the telecommunications business," said Haruo Sato, analyst at Tokai Tokyo Research Center Co. "For Hitachi, mobile is a non-core operation."


Источник: Total Telecom

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