A pair of Japan-based electronics giants, NEC Corpand Matsushita Communication Industrial Co, are in talks to ally on mobile-phone technology, suggesting they may share the risks of developing handsets that can video conference and download movie clips.
Officials from the two companies, which together hold a half of Japan's handset market and about 8 percent of the global market, said an announcement will be made today. They declined to give further details.
Mobile-phone makers are joining to defray the costs of developing models with speedy wireless Internet access and functions like those found in computers. So far, the technology has proven harder to perfect than expected and manufacturers have had to recall handsets to fix glitches and faulty software.
"Allying to develop mobile phone services for the next generation and beyond is a natural trend" that is likely to continue, said Akihiko Sakakibara, a senior fund manager at Sumitomo Marine Investment Management Co.
The Matsushita group and NEC join an already-crowded field.
Sony Corp and Sweden's Ericsson AB will form a joint venture in October to develop the newer phones while Toshiba Corp and Germany's Siemens AG are also cooperating in a similar tieup.
The Matsushita group, led by Matsushita Electric Industrial Co, and NEC will jointly develop image-processing software for mobile videophone services.
The companies also will supply products to each other, the Nihon Keizai newspaper said. Japan's No. 1 and No. 2 makers of mobile phones hope to strengthen their competitiveness with Finland's Nokia Oyj, the paper said.
Matsushita group had a 26 percent share of the Japanese market for mobile phones last year, while NEC ranked second with a 23 percent share, the Nihon Keizai said.
The newer phone services, which will enable users to transmit moving images, are scheduled for a commercial start in Japan in October. NTT DoCoMo Inc, Japan's largest mobile-phone company, originally wanted to start the services in May though that was postponed because software in the mobile phones didn't work properly.
The high-speed services are also expected to begin later in other regions, such as Hong Kong, Singapore and Europe.
Some Japanese companies have given up developing the more advanced handsets, according to recent media reports. Pioneer Corp, which began making mobile phones in 1994, has decided not to take on the costs of developing the phones, the Nihon Keizai newspaper said last week.
Fujitsu Ltd, Japan's largest maker of business computers, will not make mobile phones for DoCoMo's October rollout, the Financial Times said in June, citing Fujitsu Chief Executive Naoyuki Akikusa.
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