Smartphones, Overseas Market

By Reuters  |  Print this article Print

The move to merge the mobile businesses in a joint venture owned by Toshiba and Fujitsu comes as the market for cell phones is shrinking in Japan. The combined mobile company will become Japan's second largest mobile phone maker. Smartphones have seen increasing competition around the world with the growth of RIM's Blackberry and Apple's iPhone

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 cellphones 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 in Japan, Europe and some parts of Asia.

Despite their dominance in the domestic market, Japanese makers only have a combined share of about 3 percent 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.

Cellphone sales in Japan have shrunk almost 40 percent in the last two years, driving mobile phone makers to target overseas markets and share development costs estimated to be as much as 10 billion yen ($110 million) per new handset.

Fujitsu manufactures handsets for Japan's biggest mobile phone operator NTT DoCoMo Inc, while Toshiba mainly supplies cell phones to KDDI Corp, Japan's No.2 telecoms firm.

Fujitsu shares gained 1 percent to 593 yen after the announcement, while Toshiba gained 0.8 percent to 487 yen. The Nikkei average fell 0.7 percent.

(Additional reporting by Arnika Thakur in Bangalore; editing by Balazs Koranyi)