The domestic Japanese phone market has been in a state of contraction for some time, most notably evidenced by Mitsubishi's decision to exit the game altogether and the Sanyo-Kyocera tie-up from a couple years back. Fujitsu and Toshiba are the next two giants looking to combine their resources in the mobile space, a move that would create Japan's number two phone manufacturing venture behind Sharp and reduce to six the total number of firms making handsets there (down from ten in 2007). Though technologically years ahead of the rest of the world, Japan also suffers from deeper market saturation than perhaps anywhere else -- and the opportunities for product differentiation are sharply reduced by carrier RFPs that emphasize conformity to a standard spec sheet. Fujitsu is said to likely hold the majority stake if the deal goes down, but for what it's worth, nothing's been finalized yet. If a deal improves the odds of bringing hardware to North America by even the smallest of fractions, we're all for it.

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Fujitsu, Toshiba in talks to merge mobile units