NEC to Join Casio and Hitachi in Handset Joint Venture

Further consolidation in the Japanese mobile phone manufacturing industry is expected as NEC is said to be about to join Casio Hitachi Communications, the joint handset manufacturing venture between Casio and Hitachi.

If NEC joins up, then an NEC-Casio-Hitachi combination would be the second largest handset manufacturer in Japan after Sharp.

Currently Casio owns 51 percent of Casio Hitachi Communications and Hitachi has 49 percent. However reports say that NEC will take a larger than 50 percent of the equity of a three-way venture.

The three companies combined would have 20 percent of the Japanese handset market with operator customers which include Softbank, KDDI, and Docomo. Sharp has 23 percent handset market share.

The addition of NEC would allow the trio to reduce R&D and procurement costs and so increase profitability.

The Japanese handset market is an upgrade-only market and is not thought to be very profitable.

Mitsubishi pulled out of the handset manufacturing business last year, and Sanyo Electric sold its handset business to Kyocera.

Adding to the local industry's woes, the new Apple iPhone, the 3GS, was the top-selling handset in Japan last month.

It is being said that the target date for creating a new company for the NEC-Casio-Hitachi combination is April 2010.

The original Casio - Hitachi handset manufacturing joint venture was formed in 2004.

Electronics Weekly, a sister publication of EM Asia