Japanese electronics manufacturersNEC, Hitachi and Casio are to merge their mobile
phone divisions to improve profitability.
The firms said they are pooling their resources for developing
new mobile handsets to boost business growth.
The joint venture is "expected to result in the creation of
innovative synergies and the development of appealing new products,
in addition to future growth that is anticipated from a range of
new areas," the companies said in a statement.
The new company, to be known as NEC Casio Mobile Communications,
is expected to have the second or third largest share of the mobile
handset market in Japan after Sharp, challenging Panasonic for
second place.
The move comes after heavy financial losses.
In Japan, sales in an already saturated market dropped
dramatically after mobile operators cut handset subsidies earlier
this year. There is also increased competition from foreign
manufacturers such as Apple.
Internationally, Japanese handset makers have struggled due to
the recession and the failure by Japan to adopt international
mobile phone standards such as GSM.
The merger is expected to be completed by April 2010.
Analysts said increasing competition and economic pressure could
prompt further consolidation among rivals.