Lenovo in talks to acquire NEC mobile phone subsidiary
Chinese computer maker looks to expand smartphone sales with potential purchase of Japanese firm's struggling handset maker
With global smartphone shipments closing in on one billion units this year, Chinese technology giant Lenovo may be looking to an ally to help expand its mobile-phone operations.
Lenovo, the world's second-largest supplier of personal computers, is negotiating with Japan's NEC Corp to buy its struggling handset subsidiary, NEC Casio Mobile Communications.
According to an Asahi Shimbun report yesterday, NEC had started discussions with Lenovo about selling that business last year. The talks were confirmed in a separate Reuters report by a source familiar with the negotiations.
If the purchase goes through, it would mark the second major deal between Lenovo and NEC this decade. Lenovo invested about US$175 million worth of company shares with NEC in 2011 to take a 51 per cent stake in a joint venture, NEC Lenovo Japan Group. It is the biggest personal computer supplier in Japan, the industry's third-largest market.
Kitty Fok, the general manager at technology research firm IDC China, said: "Lenovo has been focusing increased attention on its smart mobile devices business, so taking this opportunity to build it through a strategic acquisition makes sense.
"Negotiating with NEC, which is its joint venture partner, makes it easier for Lenovo to accomplish that goal."