Have I just felt an earthquake?

Fujitsu Limited and Toshiba Corporation announced that today they have signed a memorandum of understanding (MOU) to merge their mobile phone businesses.

link: Fujitsu and Toshiba Sign MOU to Merge Mobile Phone Businesses : Fujitsu Global

Toshiba and Fujistu? If you’re an international readers, you’ve probably never touched a handset from either. In Japan, you might just have. As per tradition, those phones are rebranded via the operators.

Toshiba provides handsets for KDDI Corporation mainly, some to NTT DoCoMo and a few to Softbank Mobile. Fujistu only deals with the first second.

Yet, it’s Fujitsu who will hold most of the shares (estimates ranging from 70 to 80 percent) of that new entity which could bear its name. Why? Well, it’s produces a lot of so-called dumb phones, which I would qualify as gimmicky phones, since they boast such amazing features as waterproof capability, perfume holder and metallic yellow color.

A lot of dumb phones, but no real smart phones. Toshiba, on the other hand, has released the internationally recognized T-01A. You know a very thin unusable phone based with a custom-built UI to hide Windows Mobile 6.1.

What a blast it was. It even got a successor, the TG02, a decent effort with less emphasis on hiding WinMo 6.5. Another hit. Not.

Anyway, join the two companies and you’ve got a juggernaut holding less than 1% of worldwide market share. Which means they’re basically selling only in Japan.

With some success, to be fair. All those scented waterproof pink phones do sell. The company will actually become the 2nd biggest handset seller with 18.7% of the market, right behind Sharp (that other company you have seen phones from, right?) which holds 26.1%.

The two companies are merging in order to strengthen their smartphone handset development -saturation not being a strong enough word when it comes to the dumb phone segment, 25% mobile phone shipment plunge last year cannot be understated.
That’s a good idea. A better one would be to forgo Windows Mobile for a while -at least until Windows Phone 7- and get in the Android boat. That’s just my two cents, but when you witness 50,000 pre-orders for the Sony Ericsson (I’m certain you have heard about that company this time) Android-based Xperias, that shows you the Japanese market, for all Galapagos it can be, is ready for some action.

Some action dutifully provided by the elephant in the room, Apple’s iPhone. It might hold a tiny share of the market (let’s say 3% for the sake of debate) with almost 3m handset sold, but has clearly set a new pace in a country which for some time was used to dictate all the mobile rules.

Need one more official reason behind the joint-venture, besides the unspoken-of Casio, Hitachi and NEC mobile merger? ¬†Overseas expansion plans. Well, the phones are already mostly made in China. Oh, they’re talking about actually selling their handsets abroad. Ok then. Good luck.

Have you felt an earthquake? I didn’t.

ERRATUM: Thanks to community member Dan for spotting the factual mistake I did out of hastiness: Fujitsu only manufactures handsets for NTT DoCoMo and not KDDI.