ID :
79915
Tue, 09/15/2009 - 03:40
Auther :

Hitachi, NEC, Casio ink deal to merge mobile phone operations+


TOKYO, Sept. 14 Kyodo -
Hitachi Ltd., NEC Corp. and Casio Computer Co. said Monday they have agreed to
integrate their mobile phone operations next April as they seek to strengthen
their global competitiveness while saving development and procurement costs to
combat a saturated domestic market.
The three companies will form a new joint venture called NEC Casio Mobile
Communications Ltd. by merging NEC's mobile phone business with Casio Hitachi
Mobile Communications Co., an existing venture firm founded by Casio and
Hitachi in 2004.
The merged entity will aim to sell about 12 million units by fiscal 2012
through March 2013, of which 7 million units will be sold in Japan and 5
million units will be sold overseas, NEC Executive Vice President Akihito Otake
said at a press conference in Tokyo.
By the end of next June, the new company is expected to be capitalized at 5
billion yen, up from an initial capital of 1 billion yen at the start of the
venture in April. It will be owned 70.74 percent by NEC, 20 percent by Casio
and 9.26 percent by Hitachi, the three companies said.
''The domestic market is shrinking fast,'' Otake said, citing around a 30
percent year-on-year fall in domestic sales of mobile handsets in fiscal 2008.
''With eight companies in the domestic market, survival is becoming
increasingly difficult,'' he added.
The 2012 target will put NEC Casio Mobile Communications' market share in the
domestic market at around 23 percent, parallel to the market share of Sharp
Corp., the current biggest cellphone maker in Japan.
''In order to survive intense market competition, we need to solidify our
position at home through a new alliance framework and develop it toward global
expansion,'' Casio Managing Director Akinori Takagi said.
The new joint venture will aim to increase its overseas sales ratio by tapping
into the U.S. market through the existing sales network of Casio Hitachi Mobile
Communications, which supplies to Verizon Wireless, the biggest carrier in the
United States.
NEC's Otake admitted that even with the merger, the three companies will not be
able to compete with South Korean competitors in terms of sales volume, but
said they will try to expand their market share through strength in water-proof
and shock-proof handset technology.
They will also cooperate on expanding sales and saving procurement costs of
materials while strengthening product development by combining their
technology, know-how and resources. They hope to eventually consolidate their
separate research and development and manufacturing facilities.
NEC currently supplies its mobile phones to cellphone service providers NTT
Docomo Inc. and Softbank Mobile Corp., while Casio Hitachi Mobile
Communications supplies for KDDI Corp.'s ''au'' handsets, Softbank, Verizon
Wireless and LG Telecom Co. of South Korea.
Hitachi will not dispatch any personnel to the company's eight-member board,
which will comprise six members, including president, from NEC and two from
Casio.
==Kyodo

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