Hitachi, NEC, Casio mulling integration of cell phone biz

Kyodo News

Hitachi Ltd., NEC Corp. and Casio Computer Co. are considering integrating their mobile phone businesses to improve profitability in the saturated domestic market, industry sources said Friday.

If realized, the three would have a combined share of more than 20 percent in the Japanese market, drawing close to Sharp Corp., the biggest handset maker in terms of market share in fiscal 2008 at 23 percent.

The move, which could come as early as April, could inspire more consolidation in the industry, analysts say.

NEC is negotiating to take an equity stake of more than 50 percent in a joint venture called Casio Hitachi Mobile Communications Co., which was founded in 2004 by Casio and Hitachi, the sources said. Casio has a 51 percent stake in the joint firm and Hitachi the remainder.

NEC supplies its mobile phones to cell phone service provider NTT DoCoMo Inc. and Softbank Mobile Corp, while Hitachi makes KDDI Corp.’s au handsets while Casio serves KDDI and Softbank.

The three are believed to be trying to combine operations to slash development and materials-procurement costs as well as boost sales, the sources said.

Domestic handset shipments tumbled 27.8 percent from a year earlier to 8.35 million units in the April-June quarter, the Japan Electronics and Information Technology Industries Association said.

Besides the slow sales, technological advances that are pushing up development costs are causing cell phone makers to rethink their operations.

Amid an increasingly harsh business climate, Mitsubishi Electric Corp. ceased cell phone development and production in 2008, and Sanyo Electric Co. sold its cell phone operations to Kyocera Corp. the same year.

Sharp’s new gadget

OSAKA (Kyodo) Sharp Corp. will release on Sept. 25 a new mobile Internet device that is as easy to handle as a mobile phone but has performance similar to a personal computer.

The palm-size NetWalker has a 12.7-cm, high-resolution touch-screen liquid crystal display and a keyboard that allows users to tap various Net services, including videos and blogs, Sharp said.