Fujitsu, Toshiba Confirm Handset Merger
- By Abimbola Tooki
- Published June 22nd, 2010
- ITWorld
- Unrated
FUJITSU and Toshiba have reached a basic agreement to merge their mobile operations in October this year, a move that will create Japan’s second-largest handset maker. The merger will help the two electronics makers share development costs, but the combined entity is unlikely to pose an immediate threat to global leaders such as Nokia and Samsung Electronics.
Fujitsu, the larger of the two, will take a majority stake in the new joint venture to be launched in October. “Our handset business is profitable and strong as it is, but we can’t assume it will remain so,” Etsuro Yamada, Fujitsu spokesman, said.
According to data from the Tokyo-based research firm, MM Research Institute, a merger of the mobile phone operations of third-ranked Fujitsu and eighth-ranked Toshiba would give the combined entity a market share in Japan of about 18.7 per cent. This would put it in second place behind Sharp, which had a 26.2 per cent share of the Japanese market in the year ended March 2010, but ahead of Panasonic Mobile on 15.1 per cent. There has been a series of mergers in the Japanese handset space in recent years as the overcrowded market has sought to consolidate to cope with falling sales.
Fujitsu currently makes handsets exclusively for Japan’s largest mobile operator, NTT Docomo, while Toshiba supplies all three of the country’s major mobile firms. “For us, this merger agreement is one of our restructuring steps,” said Toshiba spokesman Keisuke Ohmori. In the fiscal year ended March, Toshiba’s mobile phone business made an unspecified operating loss, while its revenue dropped 44 per cent to about $985 million. The two companies will continue to discuss the specific details of the deal, and will sign a final accord around the end of July.
Fujitsu has been keeping its mobile business in the black by focusing on its strengths, such as water-resistant handsets, mobile phones with fingerprint readers and phones for older people.
But it does not offer cell phones in the growing smartphone segment and is eyeing Toshiba’s know-how.
Smartphones such as Apple’s iPhone and Research In Motion’s BlackBerry combine capabilities of personal computer and mobile phones, and are gaining popularity worldwide. Toshiba has been selling smartphones based on Microsoft’s Windows.
Despite their dominance in the domestic market, Japanese makers only have a combined share of about three per cent worldwide, outmatched by bigger and more efficient rivals.
Most local makers ship small volumes exclusively to domestic operators, in contrast with the world’s largest handset producer, Nokia, which mass-produces models and supplies them to vendors worldwide.
Fujitsu, the larger of the two, will take a majority stake in the new joint venture to be launched in October. “Our handset business is profitable and strong as it is, but we can’t assume it will remain so,” Etsuro Yamada, Fujitsu spokesman, said.
According to data from the Tokyo-based research firm, MM Research Institute, a merger of the mobile phone operations of third-ranked Fujitsu and eighth-ranked Toshiba would give the combined entity a market share in Japan of about 18.7 per cent. This would put it in second place behind Sharp, which had a 26.2 per cent share of the Japanese market in the year ended March 2010, but ahead of Panasonic Mobile on 15.1 per cent. There has been a series of mergers in the Japanese handset space in recent years as the overcrowded market has sought to consolidate to cope with falling sales.
Fujitsu currently makes handsets exclusively for Japan’s largest mobile operator, NTT Docomo, while Toshiba supplies all three of the country’s major mobile firms. “For us, this merger agreement is one of our restructuring steps,” said Toshiba spokesman Keisuke Ohmori. In the fiscal year ended March, Toshiba’s mobile phone business made an unspecified operating loss, while its revenue dropped 44 per cent to about $985 million. The two companies will continue to discuss the specific details of the deal, and will sign a final accord around the end of July.
Fujitsu has been keeping its mobile business in the black by focusing on its strengths, such as water-resistant handsets, mobile phones with fingerprint readers and phones for older people.
But it does not offer cell phones in the growing smartphone segment and is eyeing Toshiba’s know-how.
Smartphones such as Apple’s iPhone and Research In Motion’s BlackBerry combine capabilities of personal computer and mobile phones, and are gaining popularity worldwide. Toshiba has been selling smartphones based on Microsoft’s Windows.
Despite their dominance in the domestic market, Japanese makers only have a combined share of about three per cent worldwide, outmatched by bigger and more efficient rivals.
Most local makers ship small volumes exclusively to domestic operators, in contrast with the world’s largest handset producer, Nokia, which mass-produces models and supplies them to vendors worldwide.
