Fujitsu Ltd will buy control of Toshiba Corp’s mobile phone business and form a venture to vie with Sharp Corp for the top position in Japan’s shrinking handset market.
The new business will probably be profitable in its first year and aims for annual sales of 7.5 million handsets in the year ending March 2012, 14 percent more than their current combined sales, Fujitsu spokesman Masao Sakamoto said.
Fujitsu will own most of the venture, which starts on Oct. 1, the two companies said in a statement yesterday.
Japan’s cellphone makers are consolidating as demand drops and rivals, including Samsung Electronics Co, have deterred them from expanding overseas by providing cheap, simple handsets in fast-growing markets like China. Apple Inc has pulled away customers at home with its iPhone.
The acquisition may expand the market for Fujitsu to include Toshiba customers KDDI Corp, the No. 2 mobile carrier, and Softbank Corp, the next biggest. Fujitsu has exclusively supplied phones to the biggest wireless provider, NTT DoCoMo Inc.
Fujitsu’s cellphone unit, which provides handsets to the domestic wireless leader, has been profitable for the last five years, Sakamoto said.
NEC Corp., Japan’s biggest maker of personal computers, merged its phone unit with those of Hitachi Ltd and Casio Computer Co earlier this month.
Toshiba’s handset unit, which stopped domestic production last year, has lost money two years in a row, spokesman Keisuke Ohmori said.
Toshiba will transfer 360 engineers to the new venture, he said.
The final agreement between Fujitsu and Toshiba will be made by the end of next month, according to the statement. The two Tokyo-based companies don’t disclose the financial results from their handset businesses.
Japan’s mobile phone market is shrinking as the country’s population declines and wage stagnation limits consumer spending. Mobile phone shipments in the country fell 12 percent last year after shrinking 30 percent in 2008, according to the Japan Electronics and Information Technology Industries Association.
Fujitsu accounted for 15 percent of mobile phone shipments during the 12 months through March, while Toshiba had 3.7 percent, Tokyo-based MM Research Institute Ltd said.
Sharp Corp was the top producer with a 26 percent share, according to the Tokyo-based research firm’s estimates.
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