(Source: Bulletin)

Computer makers NEC (Japan) and Lenovo (China) are reportedly in talks to enter a joint venture. Both companies would continue to sell separate products, but they would share technologies and sales resources.  (Source:
The talks could transform into some sort of other partnership, as well

NEC Corporation's Versa line up notebooks and its desktop offerings aren't very well known outside of its home nation of Japan.  But China's Lenovo Group Limited is keenly interested in entering a partnership with the smaller competitor in order to obtain a foothold in the Japanese market, according to a report in Reuters.

Reuters cites "two sources with direct knowledge of the matter" as saying that a joint venture was in talks and could be imminent.  

Lenovo is the world's fourth largest maker of computers.  In the U.S., however, it's not in the top five (the top five in U.S. shipments are: HP, Dell, Apple, Acer, and Toshiba).

The deal is made complicated by increasingly icy relations between Japan and China stemming from China's cuts to rare earth metal exports, and other issues.  Still, the deal makes sense for both companies.  NEC made 250 billion yen ($3 billion) from its PC business last year but has yet to crack the top ten.  Lenovo is a household name, but it lacks a foothold in the Japanese market, and some of the features NEC offers.

Intellectual property and image is a key motivator to the growing trend of Chinese companies investing in smaller Japanese ones, according to Fukoku Capital management's CEO Yuuki Sakurai.  He states, "[Chinese companies invest in Japanese firms] so they won't be accused of stealing their technologies. Because they have a great amount of money in their pockets they are trying to see which companies are good for buying and I think this is going to be a wide-ranging wave throughout Japanese industry."

The move could also allow the pair to cook up joint mobile phone products.  Lenovo's competitors HPDellApple, and Acer all have mobile phone offerings released or in the works.  One of NEC's core businesses is its telecommunications unit.

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