JAP: Fujitsu and Toshiba to merge units

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Japanese technology firms Fujitsu and Toshiba are in talks to merge their handset businesses to create the second-largest maker in the Japanese market, behind Sharp.

According to newswires, sources have claimed the pair are considering a merger to pool resources, improve profitabilty and increase share of their home market, as well as to drive sales in expanding Asian markets such as China, where market leaders Nokia and Samsung already have a stake.

Combined, Fujitsu and Toshiba would have an 19 per cent share of the Japanese market, behind Sharp with 26 per cent. Panasonic has around 15 per cent. Fujitsu currently ranks third, principally through supply of NTT DoCoMo handsets, and Toshiba is eighth with a supply arrangement with operator KDDI.

The Japanese handset market has consolidated hugely in recent times, with Sharp, NEC, Panasonic and Toshiba exiting much of Europe in recent years. 

Also, NEC, Hitachi and Casio combined their handset businesses in 2009, and started trading as a single entity last month.
Kyocera meanwhile bought Sanyo’s mobile division in 2008, the same year Mitsubishi exited mobile altogether.

Japan now has six handset manufacturer brands, down from 10 two years ago, and a combination of Fujitsu’s and Toshiba’s  handset units would still only take one per cent of global handset share.

The Japanese handset market has shrunk significantly in terms of unit sales in the past two years, with operators slashing device subsidies, and, increasingly, the public is starting to choose iPhone and BlackBerry handsets, by Apple and Research In Motion respectively, over local brands.

The Nikkei reported Fujitsu and Toshiba would likely set up a joint venture later this year to combine their handset operations, with Fujitsu expected to hold the majority stake.

Toshiba said last week it was “working on various internal improvements in the mobile phone business through  reform steps, but nothing had been decided as reported in the media.”

 

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