Reuters is reporting that Japan’s NEC is in talks to sell its phone-making unit to Chinese manufacturer Lenovo. NFC seems to be taking this action after two consecutive years of losses, and wants to remove loss-making assets to bring the company back profitability.
Lenovo does not seem to be the only company NEC is talking to about a possible deal; it is also in talks with several potential domestic buyers.
NFC told Tokyo stock exchange on Friday that it has not made any decision till now.
“Japanese phone makers have struggled to gain traction overseas in markets dominated by Samsung Electronics Co Ltd and Apple Inc where they are also being challenged by upcoming Chinese makers. In Japan, the two foreign giants are whittling down their share of cell phone sales,” Reuters noted in the report.
NFC has earlier cut its mobile sales target to 4.3 million from 5 million for the year ending tomorrow, i.e. March 31.
In addition to its phone unit, NEC is also looking for potential buyers for its mobile services subsidiary NEC Mobiling Ltd for as much as $850 million, as earlier reported in Reuters.