Lenovo is in “preliminary talks” over a smartphone joint venture with NEC, according to reports, with the two companies facing very different futures in the device market.
Reuters said that while not commenting specifically on the rumour, NEC noted that its mobile phone business “is in a difficult state and we acknowledge that we need to decide on a direction for the business”.
Contrastingly, Lenovo is in a strong position in its home market of China, and is in the process of ramping-up its international activities.
A statement Lenovo filed with the Hong Kong stock exchange said that it is currently in “preliminary negotiations…in connection with a potential joint venture transaction”. NEC and Lenovo are already partners in the PC market.
This week’s reports do not mark the first times the companies have been linked: in April 2013 it was suggested that NEC would sell its mobile phone business to Lenovo.
NEC has already merged its handset unit into a joint venture with Casio (NEC Casio), which also took on the mobile devices unit of Hitachi.
The problem for NEC is that it is under pressure in its home market of Japan, as the growth in the smartphone sector leads to increased competition from both domestic and international device makers.
And the company does not have a significant presence in the international mobile device market to offset this.
Separately, Lenovo announced further availability of its Intel-powered K900 smartphone, with recent launches in Thailand and Malaysia taking the total number of markets where it is available to eight.
The device is already available in China, India, Indonesia, Russia, the Philippines and Vietnam, and Lenovo said that it intends to offer it “in 10 new markets in addition to the current set”.