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Fujitsu and Toshiba, both of Japan, announced that they would merge their handset operations by October of this year, with the pair set to sign the final agreement in July, reported Reuters Japan in June 2010.

The two companies are still in negotiations regarding their individual stakes in the new joint venture, but have apparently agreed that it will be a consolidated subsidiary of Fujitsu. According to Nihon Keizai Shimbun, Fujitsu is believed to be taking a 70-80% stake, while Toshiba, which will transfer 360 employees from their current handset division to the new entity, will own the rest. Although the merger could impact Fujitsu’s profits in the short run, it is ultimately expected to be a beneficial move. According to MMRI, a Japanese market research firm, the two companies together shipped 6.44 million units to the Japanese market during fiscal 2009. Following the merger, the new operation will be the second-largest handset maker in Japan after Sharp, which shipped 9.03 million units during the same fiscal year. Via the merger, Fujitsu hopes to strengthen its foothold in the domestic Japanese market by reorganizing its procurement and design functions and integrating Toshiba’s know-how in smartphones. The longer-range goal is to look for opportunities to venture into overseas markets.

Fujitsu, which supplies handsets to NTT DoCoMo, is known for its specialty models targeted at senior citizens. Toshiba supplies handsets to DoCoMo, KDDI, and Softbank Mobile and is strong in smartphones based on Microsoft’s Windows Mobile OS. Even so, the company’s cell-phone operation posted a loss for fiscal 2009 (ending March 2010).

One analyst believes there are more industry reorganizations on the way. Given the highly competitive domestic market and shrinking demand, there are just too many handset suppliers in Japan. Following the merger of Fujitsu and Toshiba, there will be six; three years ago, by comparison, there were 10 such suppliers.

Over the past two years, the revenue base of the Japanese handset market has shrunk by 40%. To cope, Japanese handset manufacturers have turned their sights overseas markets while attempting to reduce their overall handset development costs, estimated to be as much as 10 billion yen ($110.99 million @ yen 90.10/$US 1) per handset model.

In related news, Kyocera is bolstering its handset sales in Central and South America, reported SankeiBiz in June 2010. Via its subsidiary in the U.S., Kyocera plans to deliver handsets to a Mexican wireless carrier sometime this fall. The company is aiming to create new customers in nearby Central American countries such as Venezuela. Kyocera manufactures CDMA2000 handsets for KDDI in Japan. In Mexico, it will debut W-CDMA handsets, which are becoming increasingly popular there. Globally, Kyocera shipped about 11 million handsets during the past fiscal year. [M. Robertson, TechInsights]

Books Kinokuniya (http://www.kinokuniya.com/), a leading Japanese bookstore chain, announced that it would begin sales of ebooks in September of this year, reported ITmedia in June 2010.

The company is currently readying a viewer application for Apple’s iPad and iPhone. Down the road, it will also prepare an application for Android-based devices. The Tokyo-based company, which has outlets in the U.S., Australia, the Middle East, and Singapore, plans to also sell recording media, such SD cards with a preinstalled ebook.

Kinokuniya already has Kodansha, Shogakukan, and Shueisha, three major Japanese publishers, signed up as partners in the effort. [M. Robertson, TechInsights]

Tokyo-based Digital Media Professionals (DMP) announced that Nintendo’s upcoming handheld game console, the Nintendo 3DS, will adopt DMP’s graphics IP core, the PICA200, reported ITmedia in June 2010.

The PICA200 is an embedded 3D graphics IP core based on OpenGL ES 1.1 and featuring DMP’s proprietary 3D graphics extension Maestro technology. According to company CEO Tatsuo Yamamoto, the goal was to realize “naked-eye 3D stereo vision and video game console-style, high-quality graphics rendering, while maintaining low power consumption.”

DMP was established in July 2002 and has been developing embedded graphics technology. As a member of the Khronos Group, it participates in managing the OpenGL ES (Open Graphics Library for Embedded Systems) specification, a subset of the Open GL 3D graphics API. [M. Robertson, TechInsights]

NEC, the Japanese multinational IT company, announced that it had set up NEC Telecommunication & Information Technology (NECTIT) in Turkey to reinforce its operations throughout the Middle East and Africa, reported SankeiBiz in June 2010.

Previously, NEC Europe had been in charge of the EMEA (Europe, the Middle East, and Africa) region, including Russia. Establishing a new division for the Middle East and Africa will allow NEC to better cultivate those emerging markets.

Initially, the new company will have a staff of 23 and expand the functions of NEC’s existing sales office in Istanbul to a local subsidiary integrating sales and technology teams. The move is also intended to help speed us decision making.

According to NECTIT's President Hironobu Kurosaki, NEC “installed its first satellite communication system in Turkey in 1960s and business has expanded into a wide variety of systems that include PASOLINK, an ultra-compact microwave communications system, as well as broadcasting systems and automated mail-sorting systems.” [M. Robertson, TechInsights]

Sony Ericsson announced that it would release an Android-powered smartphone, the Xperia X8, which will be more affordable than the existing Xperia X10, reported CNET Japan in June 2010.

The exact release date of the Xperia X8 was not announced, but it is expected to sell for about 200 euros ($245.16 @ euros 0.82/$US 1). It is aimed at entertainment crazy users and features a 3-in. HVGA (320 x 480) capacitive touchscreen, and 3.2-megapixel camera. It also features Sony’s proprietary User Experience Platform (UXP) user interface, which sits on top of the Android 1.6 OS.

The handset supports GSM quad-band, UMTS HSPA 800/1900/2100, WiFi, Bluetooth, and A-GPS. Although the Xperia X8 was developed with Android 1.6 as a base, Sony Ericsson may decide to launch it with Android 2.1, or else ship it as Android 1.6 and update to Android 2.1 at a later date.

The Xperia X8, which comes in color variations of aqua blue/white, pink/white, and silver/white, will go on sale in the third quarter of 2010 in limited markets. [M. Robertson, TechInsights]

HTC of Taiwan announced its latest Android smartphone, the HTC Aria, which is available from AT&T, reported MyCom Journal in June 2010.

The HTC Aria is powered by a 600MHz processor and runs the Android 2.1 OS. Other features include a 3.2-in. HVGA (320 x 480) display, 5-megapixel camera, 7.2Mbps HSPA, WiFi, and Bluetooth.

The phone also has a proprietary user interface called the HTC Sense. And users can use Friend Stream to manage social networking services such as Twitter, Facebook, and Flickr in an integrated fashion. The phone also supports Google’s Android Marketplace, an online software store preinstalled on some Android devices.

The HTC Aria is available for $129.99 with a two-year contract and after a mail-in rebate. Though AT&T is an iPhone carrier in North America, it plans to also enrich its Android handset portfolio during the second half of 2010. [M. Robertson, TechInsights]

Nokia announced a new model for its X series, the X5, with beefed up music and SNS functions, reported ITmedia in June 2010.

The nearly square X5 measures 74.3 x 66.44 x 16.85 mm and features a slide-out QWERTY keyboard and 5-megapixel camera. It also features dedicated keys for enabling music functions and SNS (social networking service) applications. Embedded accelerometers change songs randomly when the handset is rotated and display unread messages when the handset is shaken.

The phone is scheduled to go on sale in Indonesia during the third quarter of 2010 for approximately $200.

In related news, Nokia adjusted its expectations for the second quarter of 2010 downward, blaming its poor performance on high-end phones and the weak euro. It said its revenue and profit margin for the period would be at the low-end of or possibly lower than its original forecast.

Nokia has been struggling recently in the highly competitive market for high-end touchscreen phones. The Finnish telecommunications giant has been losing market share to Apple’s iPhone, RIM’s BlackBerry, and other Android-based phones. On the other hand, sales of its low-end smartphones with thin margins are showing strength. [M. Robertson, TechInsights]

A new technology allows users to control their cell phones with simple hand gestures, without even making contact with the touchscreen, reported TMCnet.com in June 2010.

The new Touch Free interface was developed by eyeSight Mobile Technologies of Israel. It uses a mobile phone’s front-facing camera to detect the user's hand movements, which are then translated into various commands. Users can make calls and send e-mails by simply gesturing above the camera. The technology also allows users to silence incoming calls, navigate between GPS menus, activate an MP3 player, play games, and carry out many other tasks by simply swiping a hand over the device. [M. Robertson, TechInsights]