NEC, Panasonic to Tie on 3G Phone Chips, Software

NEC and Matsushita Electric Industrial (Panasonic) have agreed to work together on basic development of mobile telephone handsets, and with Texas Instruments on a common core hardware platform for future handsets, the companies said late Thursday.

The deals represent an expansion of an existing relationship between the two companies. NEC and Panasonic have been collaborating on Linux-based cell phones for NTT DoCoMo’s third-generation (3G) service since 2001.

News of a closer tie doesn’t come as a surprise. Reports of the platform deal with Texas Instruments were carried in the Japanese media several months ago, and the software agreement was reported earlier this week. After both reports, NEC and Panasonic acknowledged that talks were under way and hinted at a coming announcement.

The software tie will see NEC and Panasonic establish a joint venture in October that will work on establishing a common hardware and software platform. This will include design of a common application processor and other chips, common sourcing and design of key components for mobile phones, and joint development of handsets based on them.

Both companies will take the jointly developed handset and add their own technology and features to differentiate the phones that will then be sold under their respective brand names.

The chips tie-up with Texas Instruments will dovetail with the above work and consist of development, design and licensing of a core hardware and software platform for 3G handsets.

A new company, Adcore-Tech, will be established in August to carry out the collaborative work. NEC and NEC Electronics will hold a combined 44 percent share, Panasonic and Panasonic Mobile Communications will also have a combined 44 percent share, and Texas Instruments will own the remaining 12 percent.

The first phones based on the new handset platform are expected to be available in late 2007.

-Martyn Williams, IDG News Service (Tokyo Bureau)

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