NEC, Matsushita unit in cell phone joint venture

27 July 2006

Mumbai: NEC Corporation and Panasonic Mobile Communications Company, a subsidiary of Matsushita Electric Industrial Company, are setting up joint venture to manufacture new cell phone handsets, company sources said. The 50-50 venture is expected to cut costs of technology inputs as both the companies add more sophisticated functions to their cell phones.

The joint venture will use the Linux platform to provide technology inputs — including image and voice processing, as well as components — while NEC and Panasonic assemble and market new products independently under their own brands.

Both NEC and Matsushita have reported losses in the year ended March 2006. NEC lost ¥25 billion in its cell phone sales operation and is projecting another ¥15-billion loss for fiscal 2006.

Matsushita posted a sales loss of ¥8.4 billion in the same period.

NEC and Matsushita, meanwhile, are planning another joint venture with Texas Instruments to develop large-scale integrated chip designs and software to control the chips for handsets used in high-speed networks.

NEC and its semiconductor arm NEC Electronics Corporation will invest ¥5.3 billion, or about 44 per cent in the ¥12-billion venture. Matsushita and its phone division Panasonic Mobile will also invest ¥5.3 billion, or 44 per cent. Texas Instruments will invest ¥1.4 billion, or 12 per cent.