NEC is looking for strategic cellphone and chips partnerships

NEC Corp., the third-largest electronics conglomerate in Japan, announced earlier this week that it is currently searching for business partners for its cellphone and microchips units. The company also claimed that they are planning to come out with a concrete strategy for mobile phones tie-ups within 6 months, and in about a year and a half they would decide on potential joint production of microchips. This decision comes as a result of the 78 percent decrease in operating profit for the first half, ending September 30. NEC cellphone business has been affected by sluggish demands in the Japanese market and fierce competition in the overseas market. Currently no one of the major U.S. carriers offers NEC handsets. After pulling out of the U.S. mobile phone market in the year 2000, NEC re-entered it again in 2003, offering NEC 525 i NEC 515 handsets, but they were not followed by any other NEC models. The company sees the solution for its cellphone business in different options, such as tie-ups in development and marketing as well as an all-out integration of operations with other mobile phone makers. As for its chips unit, NEC announced in November that it would co-develop cutting-edge system chips with Toshiba Corp. The company's spokesman also stated that they were in talks with Toshiba, which is already working with Sony Corp on the development of such chips, on a possible collaboration in manufacturing. Specific timeframe, however, was not mentioned.