Japanese giants Fujitsu and Toshiba are in talks to merge their mobile handset operations, according to sources, in a move to grab a greater share of the domestic and overseas markets.
If the deal goes ahead, the joint venture would become the second largest mobile phone operator in the country after Sharp with a market share of 18.7%. Panasonic currently stands in second place with a market share of 15.1%. However, in global terms the merger would still only have less than 1% of the market share.
The Japanese handset market is increasingly under siege from overseas handset manufacturers such as Apple, Blackberry and HTC. The increased competition has seen greater consolidation. Last year, Casio, Hitachi and NEC combined their phone units. If Fujitsu and Toshiba get together, the deal would see Japan with just five handset manufacturers, down from 10 in 2007.
Joining forces could give Toshiba and Fujitsu the necessary financial muscle to compete. The joint venture could also look to expand its sales overseas as the Japanese market becomes increasingly saturated. Sales of new models in Japan have plummeted by 40% since 2008, after operators stopped subsidizing handsets.