[September 14, 2009] Hitachi, NEC, Casio ink deal to merge mobile phone operations Tweet TOKYO, Sep 14, 2009 (Kyodo News International - McClatchy-Tribune Information Services via COMTEX) -- Hitachi Ltd., NEC Corp. and Casio Computer Co. said Monday they have agreed to integrate their mobile phone operations next April as they seek to strengthen their global competitiveness while saving development and procurement costs to combat a saturated domestic market. The three companies will form a new joint venture called NEC Casio Mobile Communications Ltd. by merging NEC's mobile phone business with Casio Hitachi Mobile Communications Co., an existing venture firm founded by Casio and Hitachi in 2004. The merged entity will aim to sell about 12 million units by fiscal 2012 through March 2013, of which 7 million units will be sold in Japan and 5 million units will be sold overseas, NEC Executive Vice President Akihito Otake said at a press conference in Tokyo. By the end of next June, the new company is expected to be capitalized 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 percent by NEC, 20 percent by Casio and 9.26 percent by Hitachi, the three companies said. "The domestic market is shrinking fast," Otake said, citing around a 30 percent year-on-year fall in domestic sales of mobile handsets in fiscal 2008. "With eight companies in the domestic market, survival is becoming increasingly difficult," he added. The 2012 target will put NEC Casio Mobile Communications' market share in the domestic market at around 23 percent, parallel to the market share of Sharp Corp., the current biggest cellphone maker in Japan. "In order to survive intense market competition, we need to solidify our position at home through a new alliance framework and develop it toward global expansion," Casio Managing Director Akinori Takagi said. The new joint venture will aim to increase its overseas sales ratio by tapping into the U.S. market through the existing sales network of Casio Hitachi Mobile Communications, which supplies to Verizon Wireless, the biggest carrier in the United States. NEC's Otake admitted that even with the merger, the three companies will not be able to compete with South Korean competitors in terms of sales volume, but said they will try to expand their market share through strength in water-proof and shock-proof handset technology. They will also cooperate on expanding sales and saving procurement costs of materials while strengthening product development by combining their technology, know-how and resources. They hope to eventually consolidate their separate research and development and manufacturing facilities. NEC currently supplies its mobile phones to cellphone service providers NTT Docomo Inc. and Softbank Mobile Corp., while Casio Hitachi Mobile Communications supplies for KDDI Corp.'s "au" handsets, Softbank, Verizon Wireless and LG Telecom Co. of South Korea. Hitachi will not dispatch any personnel to the company's eight-member board, which will comprise six members, including president, from NEC and two from Casio. To see more of Kyodo News International, go to http://www.kyodonews.com Copyright (c) 2009, Kyodo News International, Tokyo Distributed by McClatchy-Tribune Information Services. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. [ Back To TMCnet.com's Homepage ]