NEC has agreed to extend a strategic partnership with Matsushita Electric in the mobile phone sector in order to survive in the Japanese market.
However, NEC president Kaoru Yano did not speak much about the mobile phone pact. He indicated that NEC does not intend to integrate its mobile phone business with that of Matsushita Electric. Yano said,
We have agreed to start talks to create a collaboration that will make the best use of the economics of scale, while maintaining the two companies’ brands.
Both the companies incurred loss last year. NEC incurred Y25bn operating loss last year and is heading towards Y15bn loss this year. Matusushit has recorded an Y8.4bn operating loss last year.
Therefore, they have decided to assist each other in mobile phone business. The collaboration would focus on handset manufacturing and could include the joint procurement of components. They also focus on research and development.
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