More consolidation may be happening among the Japanese handset makers. Last year, NEC, Hitachi and Casio agreed to combine their mobile phone businesses, and now the same could happen with Fujitsu and Toshiba. If that happens, the new company would be Japan’s second largest phone maker after Sharp. It is said that Fujitsu and Toshiba will likely set up a joint venture, with Fujitsu holding a majority stake.
The reason for such a move is obvious – cutting costs in various divisions including R&D of new high-end phones for the ever demanding Japanese market. According to estimates, development of a new product costs as much as 10 billion yen ($110 million) per new handset. Moreover, the new company will definitely combine its resources to gain some share in markets outside of Japan. Currently, Japanese companies, which pioneered cameras and Internet browsing on mobile phones, only have about a 3% combined global market share (Gartner).
The other big reason is increased competition from the likes of Apple, HTC and RIM, which keep innovating (and grabbing market share) in the smartphone space.
Fujitsu manufactures handsets for Japan’s biggest mobile phone operator, NTT DoCoMo, while Toshiba mainly supplies cell phones to KDDI, Japan’s No.2 carrier.
Unsurprisingly both companies’ representatives declined to comment, so we’ll have to wait for the next few days to see where this is going. Stay tuned…
[Via: Reuters]