Fujitsu Limited and Toshiba Corporation today announced that they will merge their cell phone divisions into one company. Fujitsu and Toshiba have signed a memorandum of understanding (MOU), which outlines the deal. According to the MOU, Toshiba will transfer its mobile phone business to a new company to be established Oct. 1 and Fujitsu will acquire a majority of the shares in the company.
The companies have their sights set on becoming the No. 1 cell phone manufacturer in Japan. Fujitsu brings its manufacturing expertise to the table, as it currently manufactures devices for sale through partner NTT DoCoMo. Fujitsu's proprietary technologies include mobile phone software platforms, water- and dust-resistant design, fingerprint security and sensor technologies.
The merger also will leverage Toshiba's smartphone-related technologies and imaging technologies developed in its LCD television business. In Japan, Toshiba provides its handsets through sales partners KDDI, NTT DoCoMo and Softbank Mobile. Last year, Toshiba shifted domestic handset production overseas in order to raise global cost competitiveness.
According to the press release, Fujitsu and Toshiba say the merger will allow them to produce better handsets while also improving business efficiency. Fujitsu and Toshiba plan to sign a final contract at the end of July.
Fujitsu Limited reported consolidated revenues of $50 billion for 2009, and Toshiba reported annual sales that surpassed $68 billion.