Japan's NEC in talks to sell mobile phone business to Lenovo

Chinese electronics heavyweight Lenovo is no stranger when it comes to talk of acquisitions and alliances. The company has been in the news for a while now with regards to a strategic alliance or licensing deal with BlackBerry.

Lenovo’s CEO Yang Yuanqing and CFO Wong Wai Ming have both said that the company has looked into BlackBerry as a potential target for a software licensing deal or a takeover. However, that rumoured deal never materialised and now BlackBerry is seeing success with the new BlackBerry Z10.

For Lenovo, the world's second largest PC manufacturer, cranking up overseas expansion after solid growth in China is a top priority. Naturally, Lenovo is looking at possible targets and this latest one is much closer to home than BlackBerry.

Looking to expand overseas

Looking to expand overseas


A Reuters report spoke of a possible deal by Japan’s NEC with Lenovo, more specifically the Japanese company’s mobile phone business. Citing information received from sources, the report says that NEC is looking at potential domestic buyers first, before finalising on a final buyer.

"Amid the rapidly changing market we are considering a number of ways to bolster the competitiveness of our mobile phone business, but nothing has been decided," NEC said in a statement through the Tokyo Stock Exchange in response to the media reports.

NEC has in the past said its handset business was important to it, but during the last two years, mobile division has been in the red, which is perhaps the reason behind the eagerness to sell. Last year, NEC cut its target for smartphone sales for Q1 2013 from 5 million to 4.3 million units.

Sony is the top handset manufacturer in Japan, and like the rest of the country’s manufacturers, has been facing intense market competition from Apple and Samsung. Owing to the popularity of phones produced by the latter two, lesser manufacturers have fallen by the wayside.

NEC also plans to sell its mobile services subsidiary NEC Mobiling Ltd for as much as $850 million, separate sources told Reuters. Marubeni and TD Mobile, a joint venture between Toyota Tsusho and Denso, are vying for the 51 percent stake in Mobiling.

Published Date: Mar 30, 2013 13:33 PM | Updated Date: Mar 30, 2013 13:33 PM