Original URL: http://www.theregister.co.uk/2013/07/17/nec_ditching_smartphone_biz_lenovo/

NEC to ditch smartmobe biz after failed Lenovo talks - report

Japanese giant tells El Reg: 'No firm decision' yet

By Phil Muncaster

Posted in Phones, 17th July 2013 09:34 GMT

Japanese IT and electronics giant NEC is ready to throw in the towel on its ailing smartphone business after a deal with Chinese PC giant Lenovo failed, according to reports from Japan.

Rumours emerged earlier this month that NEC had been chatting to the Chinese firm since 2013 about selling its smartphone biz or partnering up.

Those mutterings intensified when Lenovo told the Hong Kong Stock Exchange it was in “preliminary negotiations” with an unnamed company for a “potential joint venture transaction”.

The rumours were particularly believable as NEC and Lenovo already operate a PC joint venture in Japan, with has helped the former recoup some of its whopping debt, forecast at ¥100bn (£600m) for 2011.

Now a Nikkei report seen by Reuters says that NEC had indeed offered Lenovo a majority stake in NEC Casio Mobile Communications (71 per cent owned by NEC, while Casio has a 20 per cent share and Hitachi 9 per cent) but has now decided to exit the loss-making business after a deal couldn’t be struck.

The firm will now apparently sell some of its mobile phone patents and reassign most NEC Casio staff to other groups.

NEC may have fallen on hard times financially but it still has around five per cent of Japan’s sizeable smartphone market and is continuing to innovate in the space. Back in February it demoed a dual-screen Medias W handset at Mobile World Congress, for example.

The firm also made it onto the Patent Power scorecard for “computer systems” in December last year, proving its R&D is still alive and well.

As for the smartphone rumours, it’s uncertain where that now leaves NEC’s joint venture with Fujitsu and Docomo to develop smartphone chips, announced in August 2012.

However, its 17.8 per cent share in Access Network Technology Limited may yet reap much-needed financial rewards, as the venture aims to make and sell chips to other handset players globally as well as for its members.

An NEC spokesperson told The Reg that although it was considering a number of options, no firm decision had yet been made on its smartphone biz. ®