Matsushita and NEC are already the two biggest mobile phone manufacturers in Japan, so if they combined their resources they would create a giant. That’s exactly what they have done.
The two companies are about to announce a joint venture which will, they hope, solve some of the problems that both companies face in their phone divisions. Neither company is profitable in their handset making efforts due to two main factors – a mature domestic market and high development costs.
By bringing their resources together, Matsushita (parent company to Panasonic) and NEC can significantly decrease the cost of R&D, making it easier to maximize niches in the market. The joint venture will combine the software engineers on both sides to work on a unified Linux-based OS.
Despite working together, both companies will still maintain their own brands and their own factories. This is not the first time that these companies have joined forces. They have been cooperating in software development for five years. The reality for the two companies, though, is that cooperation is necessary for continued existence.