NEC, Casio, Hitachi to merge handset businesses

The three companies are relatively small players in the domestic market for handsets, which is saturated and dominated by Japanese manufacturers, although imports like the iPhone have scored some success in recent years.

Under the move, NEC will join Casio and Hitachi's mobile joint venture set up in 2004.

The new business, capitalized initially at 1 billion yen ($11 million) will be 66 percent owned by NEC, 17.34 percent by Casio and 16.66 by Hitachi. By June 2010, that will be raised to 5 billion yen ($55 million), with NEC owning a 70.74 percent stake, Casio 20 percent and Hitachi 9.26 percent.

The three companies will share their technology and resources to lower development costs and boost their competitiveness and brands, they said.

Japanese makers have largely failed in selling handsets overseas, partly because the mobile network technology in Japan is different from U.S. and European systems. Mobile phones here also tend to be loaded with quirky features that aren't likely to be popular abroad.

NEC makes cell phones for Japanese mobile carriers NTT Docomo Inc. and Softbank Mobile Corp., while Hitachi and Casio make handsets for KDDI Corp. and Softbank.

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