NEC hasn’t really made any notable smartphones making the company’s mobile phone unit struggle in a market dominated by popular brands. The company is currently in talks with several other vendors for a possible sale of their phone unit and one of the company’s interested in buying this is Lenovo.
Lenovo was previously rumored to be interested in buying BlackBerry but this time around has set its sights to NEC. Sources familiar with the discussion say have both companies have already started discussions of the sale. Two other Japanese companies are also interested in buying out NEC’s mobile phone unit.
If the deal of Lenovo pushes through then this will be the second deal made between both companies. Back in 2011 Lenovo invested US$175 million worth of company shares with NEC in a joint venture that formed NEC Lenovo Japan Group. This joint venture became the biggest PC supplier in Japan.
According to Kiitty Fok, the general manager at technology research firm IDC China, “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.”
The mobile phone unit of NEC has posted losses for two consecutive years now. In a statement released by the company they said that “Amid the rapidly changing market we are considering a number of ways to bolster the competitiveness of our mobile phone business, but nothing has been decided.”
Previously, NEC officials said that their mobile phone unit was an integral part of the company’s growth. The company however has decreased its expected smartphone sales from 5 million units to 4.3 million units for the fiscal year which ends this month.
Lenovo has yet to make an official statement regarding this report.