Japan trio to merge mobile units

Hitachi forecasts a net loss of 270bn yen this year

Japanese electronics groups Hitachi, Casio and NEC have announced plans to merge their mobile phone operations to cut costs and become more competitive.

The three companies, which are relatively small players in the mobile phone market, will share both technology and resources.

By next year, NEC will own 71% of the new business, with Casio owning 20% and Hitachi holding a 9% stake.

The merger will create Japan's second largest mobile phone maker.

Analysts say there could be further consolidation in the competitive Japanese mobile phone market.

Record loss

Casio and Hitachi created a joint mobile phone venture in 2004.

It makes handsets for Japanese mobile carriers KDDI Corp and Softbank Mobile Corp, while NEC makes phones for NTT Docomo and Softbank.

All three companies have suffered badly during the downturn.

NEC is in the process of cutting 20,000 jobs worldwide, while Hitachi recently announced that it expects to make a loss of 270bn yen ($3bn; £1.8bn) this year.

The firm made a loss of 787.3bn yen last year - a record for a Japanese manufacturer.