Sept. 25 (Bloomberg) -- Microsoft Corp., the world's largest software maker, and Japan's Kenwood Corp. signed a cross- licensing agreement to develop technology for car-navigation systems and consumer electronics.
Both companies will share software and technology to be used in the products, Redmond, Washington-based Microsoft said in a statement distributed by PRNewswire yesterday. Kenwood will make a cash payment to Microsoft for use of its patents, the statement said, without providing figures.
The agreement follows a plan by Japan's Sharp Corp. and Pioneer Corp. to jointly develop car-navigation equipment and DVD players. Tokyo-based Kenwood will create a venture next month with Victor Co. of Japan Ltd., a unit of Matsushita Electric Industrial Co., to develop car electronics and home-audio systems to cut expenses and bolster profitability.
Kenwood's car electronics division, the company's biggest by revenue, posted an operating loss of 2 billion yen ($17 million) last fiscal year. Sales at the division dropped 12 percent to 94.9 billion yen in the year ended March 31 on price declines and costs to develop new products.
Sharp, Japan's largest maker of liquid-crystal display televisions, last week said it will buy new shares equivalent to a 14 percent stake in Pioneer for 41.4 billion yen. The stake purchase, to be made in December, will make Sharp the biggest shareholder in Pioneer and help the Osaka-based TV maker enter the car-navigation market.
Kenwood shares rose 0.7 percent to 153 yen at the 11 a.m. break on the Tokyo Stock Exchange, while the benchmark Nikkei 225 Stock Average fell 0.1 percent. Microsoft shares gained 1.5 percent to $29.08 in Nasdaq Stock Market trading yesterday.
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