Toshiba, Fujitsu in talks on merging mobile phone businesses+

TOKYO, June 11 Kyodo -
Toshiba Corp. and Fujitsu Ltd. are in talks toward integrating their mobile
phone businesses to boost competitiveness amid sluggish sales of handsets,
sources close to the matter said Friday.
The integration, if realized, would create the second-largest mobile phone
maker in Japan, with a combined market share of nearly 20 percent, behind
industry leader Sharp Corp.
The two electronics makers are expected to create a joint venture possibly by
the end of the year, with Fujitsu likely to have a greater stake, the sources
said.
By integrating their mobile phone businesses, Toshiba and Fujitsu aim to
strengthen the development of mobile phones and enhance their overseas
operations, the sources said.
According to MM Research Institute, a Tokyo-based research firm, domestic
shipments of Fujitsu handsets in fiscal 2009 stood at roughly 5.18 million
units, and ranked third with a share of 15.0 percent, while Toshiba ranked
eighth with a share of 3.7 percent, or about 1.26 million units.
Combining Toshiba and Fujitsu would place the two firms behind Sharp, with a
share of 26.2 percent, thus overtaking the current No. 2 Panasonic Mobile
Communications Co., a mobile phone unit of Panasonic Corp., at 15.1 percent.
Fujitsu is in the black in terms of its mobile phone operations mainly due to
its popular Raku Raku phone, which is very easy to use and targets elderly
customers and others who want a phone with simplified functions.
Toshiba, meanwhile, is struggling in the mobile phone market. Last year, the
electronics maker ended production of mobile phones in Japan and shifted to
overseas outsourcing to cut costs.
Amid shrinking demand for handsets, realignment among manufacturers has been
noticeable, the latest being the integration of mobile phone operations of NEC
Corp., Hitachi Ltd. and Casio Computer Co.
With the Long-Term Evolution, a next-generation mobile phone communications
format, set to be introduced in Japan this year and become recognized as an
international standard, Toshiba and Fujitsu are aiming to boost overseas sales
by focusing on next-generation mobile phones, the sources said.
In the face of a saturated domestic mobile phone market, many firms are
apparently aiming to survive competition by boosting sales abroad, where they
see potential growth.
According to the Japan Electronics and Information Technology Industries
Association, the country's domestic mobile phone shipments in fiscal 2009
declined 12.3 percent from the previous year to an 11-year low of 31.42 million
units as prices rose on sales incentive reform in the market.
==Kyodo
2010-06-11 23:04:44