Toshiba, Fujitsu to combine mobile phone businesses

Japanese electronic companies Toshiba and Fujitsu will merge their mobile phone businesses in October this year.

The move comes in the backdrop of increasing competition in the Japanese market, especially in the smartphone segment, from the likes of US-based Apple and others.

Both companies have entered into an agreement for the proposed deal. "Toshiba will transfer its mobile phone business to a new company, to be established October 1, 2010, and Fujitsu will acquire a majority of the shares in the company," the two firms said in a joint statement on Thursday.

Toshiba and Fujitsu expect to sign a final contract at the end of July.

The statement noted that the collaboration would allow Fujitsu and Toshiba to strengthen their handset development platforms for the Japanese market and would help in developing next-generation handsets for the expanding smartphone market.

"The companies will manufacture handsets which are responsive to the needs of customers... Fujitsu and Toshiba will collaborate to develop new handsets for markets in and outside Japan," it added.