Tokyo, July 27, 2006 – NEC Corporation (“NEC”), Matsushita Electric Industrial Co., Ltd. (“Matsushita”) and Panasonic Mobile Communications Co., Ltd. (“Panasonic Mobile”) announced today the signing of a memorandum of understanding on the establishment of a development company for mobile handsets. The new company will contract development of mobile handsets and a common software and hardware platform.

 

Through this joint venture, the three companies intend to reinforce existing collaboration between NEC and Panasonic Mobile. The development of common middleware, applications, and hardware platform will enable the companies to avoid duplication of development efforts, leading to greater efficiency and enhanced development capabilities, and a reduction in both fixed and variable costs. This will equip NEC and Panasonic Mobile with a solid technology platform to stay at the top of innovation in functionality and communication speed as the industry moves to 3.5G and 3.9G technologies towards 2010, while simultaneously focusing resources on differentiation.

 

The three companies intend to establish this joint venture early October, 2006. The company will be capitalized at 100 million yen with an equal ownership between NEC and Panasonic Mobile.

 

The following are its main business.

 

· Planning and development of a common software platform

· Planning and development of a common hardware platform

- Design and evaluation of a common application CPU and integrated system LSI

- Sourcing, design and evaluation of key devices

- Design and manufacturing of an evaluation board

· Joint development of mobile handsets (based on the above platform)

 

Through this joint venture, NEC and Panasonic Mobile expect to create synergies by combining NEC’s expertise in communications and computer technologies and Panasonic Group’s strength in consumer electronics and audio visual products.

 

NEC and Panasonic Mobile will respectively handle product planning, product development, procurement and manufacturing, as well as sales of handsets bearing their respective brand names “NEC” and “Panasonic”.

 

NEC, Matsushita and Panasonic Mobile started collaboration on the development of mobile phones in August 2001. This effort has led to the successful shipment of NTT Docomo’s FOMA® mobile phones in November 2004, which incorporates a LinuxTM based middleware platform jointly developed by NTT Docomo, NEC, and Panasonic Mobile.

 

Outline of the business scheme:

 

Outline of the New Company (Tentative)

Company name: To be decided

Headquarters: Tsuzuki ku, Yokohama City, Kanagawa Prefecture

Date of establishment: Early October, 2006

Main Business: Development of a common hardware and a software platform for mobile handsets and joint development of mobile handsets

Capital: 100.0 million yen

Ownership: NEC Corporation (50%) Panasonic Mobile Communications Co., Ltd. (50%)

Employees: Approximately 140

Management structure: To be decided (President, Vice president, and 2 board members) At the time of establishment, the president will be appointed from NEC and the vice president from Panasonic Mobile.