Three Japanese electronics firms have announced plans to merge their mobile phone operations.
NEC, Casio and Hitachi will join forces next year, sharing technology and operations resources, to form a new mobile phone company.
NEC will hold a 71 per cent majority of the group, while Casio will grab a 20 percent stake, leaving Hitachi with a 9 per cent slice.
All three companies have hitherto not made significant impact in the mobile phone market, though NEC has held relative success in the West. Together, the three are expected to create the nation’s second largest mobile phone company.
Japan, a nation that lives on its imports and exports, has become a major victim of the current global recession. The business performances of Casio, NEC and Hitachi are not an exception to this rule.
NEC is currently axing some 20,000 jobs across its global workforce, while Hitachi is expecting to make a loss of 1.8 billion this year.
Analysts have however been more upbeat about Casio, despite the group’s trade performances of late. The group, more known for its cameras and G-Shock watches than mobile phones, was recently upgraded by Credit Suisse to "outperform".
The group’s shares rocketed at the end of August on merger speculation.
Analysts are predicting further consolidation in the Japanese mobile phone market.