Casio, Hitachi in pact for mobiles

TOKYO: Casio Computer Co Ltd, a top digital watch maker, and Hitachi Ltd, Japan's biggest electronics conglomerate, said that they would jointly develop mobile phones to cut costs and strengthen overseas sales.

The two firms said they would set up a joint venture in April 2004 to take over development, design and procurement from the two firms' cellular phone businesses.

It will be capitalized at three billion yen ($27.6 million) and will be owned 51 percent by Casio, with Hitachi having the rest.

The move comes as Japan's mobile phone operators look to third-generation services, which are more suitable for transmitting 'rich content' such as photos and video clips than second-generation services, to fuel profits in a saturated domestic market.

The introduction of photo phones with high-resolution pictures has boosted development costs at handset makers.

"The establishment of the new company will...save development expenses through the use of shared handset platforms and (lead to) efficient use of development resources," the companies said in a statement.

The two firms, relatively weak handset makers at home, said they also aim to supply their products to overseas markets, where demand for data communications is expected to grow fast.

Each company will continue to sell handsets under its own brand.

Reuters