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Fujitsu and Toshiba discuss mobile phone merger

Japanese firms Fujitsu and Toshiba are discussing the merger of their mobile phone businesses in an attempt to strengthen their collective position in the growing market, according to reports.

Japan's mobile phone market was once one of the world's most sophisticated but with ten different manfacturers, none was able to rise to global prominence. This sophistication lead to the virtual saturation of the domestic market making hard for manufacturers to expand. The Japanese also face competition from the likes of the iPhone.

A merged Toshiba-Fujitsu would create the second-biggest phone maker in Japan, behind Sharp.

Fujitsu currently makes phones for NTT DoCoMo, while Toshiba mainly supplies the KDDI network allowing the possibility of cross-network handset and potentially greater economies of scale.

According to the FT's folk 'familar with the negotiations', a Toshiba-Fujitsu merged phone firm business would be majority-owned by Fujitsu, but negotiations are ongoing and may indeed yet amount to nothing.