Hitachi, NEC, Casio ink deal to merge mobile phone operations

Hitachi, NEC Corp, and Casio Computer Co today said they have agreed to integrate their mobile phone operations by next April as they seek to strengthen their global competitiveness by saving development and procurement costs to combat a saturated domestic market.

The merger of the three handset manufacturing businesses will create a combined share of more than 20 per cent in the Japanese mobile phone market, bringing them into closer competition with Sharp Corp, the current industry leader with a market share of 23 per cent in fiscal 2008.

The three companies will form a new joint venture called NEC Casio Mobile Communications. By merging NEC's mobile phone business with Casio Hitachi Mobile Communications Co, an existing venture firm founded by Casio and Hitachi in 2004.

By the end of next June, the new company is expected to be capitalised at 5 billion yen, up from an initial capital of 1 billion yen at the start of the venture in April. It will be owned 70.74 per cent by NEC, 20 per cent by Casio and 9.26 per cent by Hitachi, the three companies said.

Hitachi will not dispatch any personnel to the company's eight-member board, which will comprise six members from NEC and two members from Casio.

The three companies said they will cooperate on expanding sales and the procurement of materials while strengthening product development by combining their technology, know-how and resources.