Casio Computer Co. and Hitachi Ltd. launched a mobile-phone joint venture Thursday in another marriage between high-tech heavyweights pursuing cost effectiveness in a cutthroat market.
Tokyo-based Casio Hitachi Mobile Communications Co. is considered a laggard in the market, following in the footsteps of peers such as Sony Corp., which set up a mobile-phone joint venture with Swedish telecom giant Telefon AB LM Ericsson in 2001.
Matsushita Electric Industrial Co. and NEC Corp. formed an alliance in the same year to develop third-generation handsets, followed by a similar business tieup between Mitsubishi Electric Corp. and Toshiba Corp. in 2002.
The Casio-Hitachi venture will engage in operations ranging from development and design to procurement work and sales activities regarding cutting-edge models for KDDI Corp.'s au services.
Casio offers proven high-density surface mounting, image processing and other technologies accumulated from its consumer electronic business, while Hitachi's contributions include advanced high-speed data communications, device application and system design.
"We want to see our products expand our market share in Japan to become the No. 1 provider for the au services," said Tateki Oishi, a former head of Casio's communications business who became president of the new company.
Capitalized at 3 billion yen, the company is owned 51 percent by Casio and 49 percent by Hitachi. It aims to expand its operations by offering products based on code division multiple access (CDMA) wireless technology in overseas markets.
Electronics companies are inevitably joining forces in the lucrative but demanding mobile phone market, in which rapid growth in multifunctionality and the evolution of high-speed, value-added communications services are severely testing technological expertise.
The industry as a whole is constantly under pressure from consumers who want to replace their handsets with new, more sophisticated ones in short cycles. Such a market situation forces manufacturers to shoulder huge costs to develop new products.