Reports: Toshiba, Siemens to develop next-generation mobile phones

Executives from the two companies are currently in talks and will announce a comprehensive pact by the end of the year, the Nihon Keizai business newspaper said, without citing sources.

The reported negotiations come at a time Japanese and European electronics manufacturers are anxious to find partners ahead of the introduction in both markets of a common standard for next-generation mobile phones.

Calls to Toshiba's headquarters in Tokyo went unanswered on Friday, a national holiday in Japan. According to the newspaper report, the two companies will start by jointly developing a video-capable mobile phone for Asian and European markets, a project that will cost an estimated 40 billion yen (dlrs 369.8 million).

They are still discussing whether to cooperate in producing and marketing the phones, Kyodo News agency reported. The backers of the deal hope the combination of Toshiba's cutting-edge video-compression technology and Siemens's extensive sales network in Europe will add up to a large share of the global market for mobile phones with video and other increasingly sophisticated features, the Nihon Keizai report said.

Toshiba and Siemens currently account for only 7 percent of sales of mobile phones _ a quarter of the market share held by industry leader Nokia Corp. of Finland, according to the Gartner Group. But changes could begin next year, when a new standard for "third generation" mobile phones called Wideband Code Division Multiple Access, or W-CDMA, makes its debut in Japan and Europe. The market for third-generation mobile phones is expected to grow to 1 trillion yen (dlrs 9.24 billion) by 2005, the newspaper said. In September, Japan's Matsushita Communication Industrial Co. and Sweden's Telefon AB L.M. Ericsson inked an agreement to jointly develop their own third-generation phone.

(AP)