Developing or procuring key components for mobile phone handsets are major reasons NEC Corp. will collaborate with Matsushita Electric Industrial Co. and Texas Instruments Inc. in the mobile phone business, NEC President Kaoru Yano said Monday.
"Negotiations with Matsushita and TI are in the final stage," Yano told a news conference, adding, "I hope to make the utmost" of the three-way alliance.
Earlier this month, struggling NEC released its financial figures for fiscal 2005, showing its group net profit plunged 84.3 percent to 12.1 billion yen due to drops in the prices for computer chips, computers and mobile phones.
NEC will do its utmost to achieve its goal of 130 billion yen in operating profit this fiscal year, the president said.
To reach that target, Yano said NEC will reduce the number of handset models it will offer to make that sector more cost-effective and decrease the number of plants supplying overseas markets. Yano ruled out the possibility that NEC and Matsushita would merge their mobile phone divisions.
"It would not be beneficial for the two companies to make a brand that no one would notice," Yano said of the merger speculation.
"It is important to develop basic components and produce separate products that are unique to each of the companies." Yano said his firm will concentrate its resources on next-generation network business, which he said is expected to expand.