Hitachi Ltd, Japan's biggest electronics maker, said on Tuesday it is considering entering the potentially lucrative Chinese mobile handset market by setting up a joint venture later this year.
A spokesman for Hitachi said his company was in talks with Hisense Group of China over setting up a joint venture to produce mobile handsets in a country where mobile phone penetration is low and growth potential high.
The move followed news earlier this month that Japanese mobile handset makers, hit by a slowdown in the global handset market, are doubling production in China.
"We are mulling such a joint venture but have not reached any basic agreement yet," he said. "We are hoping to establish the one in China by the end of this year."
Hitachi announced last September it had agreed to provide mobile phone manufacturing technology to the Hisense Group and that the two firms would study the possibility of setting up a joint venture to produce handsets.
In the year ended on March 31, Hitachi produced about 1.25 million units of mobile handsets for KDDI Corp's "au" wireless service, which uses the cdmaOne network developed and marketed by US firm Qualcomm Inc.
Hitachi accounted for nearly 20 percent of au's cdmaOne mobile phones in Beijing.
Earlier this month, Japan's largest mobile handset maker, Matsushita Communication Industrial Co Ltd, said it plans to produce two million handsets in China this year, doubling from one million last year.
Mitsubishi Electric Corp also plans to boost output in China to 1.2 million this year, up from 500,000 last year. The handsets are made at a joint venture plant in southern Zhejiang province set up in 1993. The plant is capitalised at US$5 million.
The number of cellphone users in China has grown to more than 100 million, about seven percent of its population, with some analysts predicting the penetration could reach 10 percent by the end of this year.
Another incentive for Japanese firms to manufacture in China are the 100 percent tariffs on mobile phone imports that Beijing slapped on Japanese imports last month as part of a festering trade dispute.
Shares in Hitachi rose 3.99 percent at 1,043 yen as of 0511 GMT, outperforming the benchmark Nikkei 225 share average's 2.07 percent rise.
(China Daily 07/31/2001)
