Fuji-Shiba? Merger Between Fujitsu and Toshiba Rumored

Japanese Nikkei Business Daily reported Friday that Fujitsu Ltd and Toshiba Corp are in the final stages of talks to merge their mobile phone businesses.  The combined operation would become Japan’s second largest handset maker after Sharp Corp.
The partnership would reportedly take the form of a joint partnership with Fujitsu as the majority stakeholder.  The merger follows closely upon the merger of Casio Computer, Hitachi Ltd, and NEC Corp’s mobile phone operations earlier this year that resulted in the founding NEC Casio Mobile Communications.
Both Fujitsu and Toshiba are not officially commenting on the matter with Toshiba issuing a press release stating “we’ve been working on various internal improvements in the mobile phone business through reform steps, but nothing has been decided as reported in the media.”

Japan’s mobile phone industry is under intense restructuring pressure as the domestic market has fully matured.  Unlike European and US manufacturers’ global distribution business model, Japanese cell phone manufacturers generally produce handsets for a dedicated domestic carrier.
Fujitsu manufacturers for NTT DoCoMo Inc and Toshiba for KDDI Corp, Japan’s #1 and #2 carriers, respectively.  Combined, all Japanese manufacturers make up only about 3% of total global share as compared to market leader Nokia’s 35% share in the last quarter.
Hideaki Yokota, analyst with MM Research Institute, suggests that “US and European makers are already established in China. On the other hand, India and Africa brands are not so established, so there would be room for change.”