Japanese electronics giants Toshiba and Fujitsu have announced plans to merge their mobile phone businesses.
The joint venture would then become the second largest handset company in Japan. Currently ranked third (Fujitsu) and eighth (Toshiba), their…
Japanese electronics giants Toshiba and Fujitsu have announced plans to merge their mobile phone businesses.
The joint venture would then become the second largest handset company in Japan. Currently ranked third (Fujitsu) and eighth (Toshiba), their merged market share will jump to 18.7%, just 7.5% behind national leader Sharp.
A joint statement confirmed this week’s press speculation about such a move, and outlined that Toshiba will spin off its handset operations. Fujitsu is expected to hold a 70-80% stake in the spun-off unit. In the year to March, Toshiba’s cellphone operation was losing an estimated US$20m-30m, according to Yuichi Ishida, an analyst at Mizuho Investors Securities.
Operating profits on Fujitsu’s end, meanwhile, will halve from the year before, to about US$100m. Joining up will help them save on R&D and other costs.
The deal would allow Toshiba/Fujitsu to compete more aggressively in the Japanese domestic market and with incoming smartphone threats from foreign companies Apple, HTC and RIM. The JV would also allow the firms to develop their global businesses, combining their development, production and sales with an eye to making a full-scale entry into Asia outside Japan and into other overseas markets.
This is the latest in a spate of collaborations between large Japanese corporations. NEC, Hitachi and Casio Computer combined their mobile phone businesses last year and the venture started operating this month.
Fujitsu and Toshiba plan to sign a final contract at the end of July 2010. In the markets, Fujitsu shares traded flat at 587 yen, while Toshiba gained 0.8% to 487 yen. The Nikkei average was down 0.2%.