Friday, July 28, 2006

NEC, Panasonic and TI join forces for 3G/3.5G mobile development

For quite a while, there was a high level of sharing between these 3 companies in their mobile phone chipsets. Now they have formalised the partnership by forming a joint venture in Japan called AdCore-Tech

Tokyo, July 27, 2006 --- NEC Corporation ("NEC"), NEC Electronics Corporation ("NEC Electronics"), Matsushita Electric Industrial Co. Ltd. ("Matsushita"), Panasonic Mobile Communications Co. Ltd. ("Panasonic Mobile") and Texas Instruments Incorporated ("Texas Instruments") today announced that the five companies have signed an agreement to establish a new joint venture company. The company will conduct global development, design, and technology licensing for a hardware and software communications platform (*1) to manage the core communications functions for mobile handsets for the third generation (3G/3.5G) and beyond.
The new company, Adcore-Tech Co., Ltd ("Adcore-Tech"), is scheduled to be established in August, 2006 at the Yokosuka Research Park in Yokosuka, Japan, with approximately 180 employees. The five companies will jointly invest 12.0 billion yen in the new joint venture, with approximately 44 percent held jointly by NEC and NEC Electronics, approximately 44 percent held jointly by Matsushita and Panasonic Mobile, and approximately 12 percent held by Texas Instruments.
As mobile phones become increasingly sophisticated and improved with the integration of music, video, broadcasting and other new technologies for internet and high-speed, high-volume communications, an extraordinary amount of resources are required for their development.
Looks like a wise move to me. The development costs of 3G and 3.5G (HSPDA) handsets is ever increasing. Its usually risky for any one company to shoulder the cost of development of all technology in a 3G handset, even a technology giant like NEC. So rather than reproducing the same efforts as their competitors, each company can specialise in certain areas. This is what they call "synergy" :)