Panasonic and NEC Partner in Mobile Handset Business

-- Synergy of shared resources and expertise expected to accelerate the development of advanced mobile handsets -- August 21, 2001 -- NEC Corporation (NEC), ranked among the world leaders in computers, communications and electronic devices, with Matsushita Electric Industrial Co., Ltd. (MEI) and one of MEI's principal subsidiaries, Matsushita Communication Industrial Co., Ltd. (MCI), both known worldwide for the Panasonic brand of digital consumer and communications products, today announced that they have signed an agreement to form a development alliance aimed at strengthening global business expansion of their technologies and products in the field of advanced mobile handsets.

The merging of the mobile phone market with the Internet, along with the achievement of larger-capacity and higher-speed networks, has enabled the introduction of a wide variety of new media and new technologies such as music, video and broadcasting, creating many new business opportunities in the emerging mobile multimedia market. The mobile handset, as the primary means of accessing the Internet in this market, is now becoming a highly advanced device adopting many new features and technologies.

With this background in mind, Matsushita and NEC -- both industry leaders in mobile Internet technologies and the development of third-generation (3G) (W-CDMA) mobile terminals -- have agreed to join forces to spur the creation of an innovative mobile Internet market, to accelerate the expansion of 3G businesses around the world through more efficient use of development resources and faster development time, and to introduce reliable and high quality handsets backed by the combined know-how and expertise of both companies.

Through the agreement signed today, Matsushita and NEC will implement a significant global business development alliance in such areas as technical standardization, core engineering development, and software development in the mobile handset field. The agreement comprises the following key aspects:

1. Cooperation in designing common specifications/architectures for third-generation mobile handsets, and in developing application software and other related products;
2. Joint development of new mobile terminals for the mobile multimedia market;
3. Close cooperation on quality validation for new products;
4. Possible OEM supply of various products, when necessary, ranging from 2.5G GSM/GPRS*1 to 3G devices.

Both companies also plan on making development results of this alliance available to other manufacturers. This cooperative agreement brings together the expertise of both Matsushita and NEC in development engineering and product planning, and will focus primarily on 3G mobile handsets. Both companies intend to concentrate on introducing products in a timely manner for the rapidly expanding global mobile multimedia market. Pooling together their creative visions, resources, and desires to succeed, Matsushita and NEC each aim to become the world's leaders in advanced mobile handsets, jointly creating and enhancing the expansion of the mobile multimedia field.

About NEC Corporation
NEC Corporation (NASDAQ: NIPNY) (FTSE: 6701q.l) (TYSE: 6701) is a leading provider of Internet solutions, dedicated to meeting the specialized needs of its customers in the key computer, network and electron device fields through its three market-focused in-house companies: NEC Solutions, NEC Networks and NEC Electron Devices. NEC Corporation, with its in-house companies, employs more than 150,000 people worldwide and saw net sales of 5,409 billion yen (US$43 billion) in fiscal year 2000-2001. For further information, please visit the NEC home page at http://www.nec.com

About Matsushita Electric Industrial
Matsushita Electric Industrial Co., Ltd., best known for its Panasonic, National, Technics, and Quasar brand names, is a worldwide leader in the development and manufacture of electronics products for a wide range of consumer, business, and industrial needs. Based in Osaka, Japan, the company recorded consolidated sales of 7,681.6 billion yen (US$61.45 billion) for the fiscal year ended March 31, 2001. In addition to the Tokyo and other Japanese stock exchanges (6752), Matsushita's shares are listed on the Amsterdam, Dusseldorf, Frankfurt, New York, Pacific (NYSE/PCX: MC), and Paris stock exchanges. For more information, visit the Matsushita web site at http://www.panasonic.co.jp/global/top.html.

About Matsushita Communication Industrial
Matsushita Communication Industrial Co., Ltd. is a principal subsidiary of Matsushita Electric Industrial Co., Ltd., and specializes in four business areas: mobile communications, automotive multimedia, AV & security, and system solutions. One of the world's first 3G handset manufacturers for trial services in Japan, the company recorded consolidated sales of 1,060 billion yen (US$8.56 billion) for the fiscal year ended March 31, 2001. For more information, visit http://www.mci.panasonic.co.jp/english.

*1 GPRS (General Packet Radio System): Packet data digital cellular communications service based on the GSM (Global System for Mobile Communications) standard.

SOURCE Matsushita