updated 12/6/2004 10:10:11 PM ET 2004-12-07T03:10:11

Electronics maker Fujitsu and Internet equipment giant Cisco have agreed to work together on developing high-end routers used for advanced Internet networks in Japan, the two companies announced Monday.

The alliance will take advantage of San Jose, Calif.-based Cisco Systems Inc.'s leadership in Internet protocol technology and Tokyo-based Fujitsu Ltd.'s edge in networking products. The companies will be able to provide better quality products to telecommunication service providers more quickly, both sides said in a statement.

The companies will work together to develop router operating systems for Japanese providers, and Fujitsu will offer routing products under a joint Fujitsu and Cisco brand, with the first product expected in spring 2005.

"Partnering is a strategic imperative for companies such as Cisco and Fujitsu," said Mike Volpi, senior vice president of Cisco's Routing Technology Group, adding that Japan is one of the leading nations in the world in broadband.

"In the future I believe Internet business models will come from Japan," he said.

Fujitsu, which earns about $392 million in revenue from routers and switches, hopes to increase that to $588 million in three years.

Cisco, which has about 60 percent of Japan's $3.9 billion market in routers and switches, said the alliance with Fujitsu will help the company to secure 70 percent of the market share.

In Japan, more companies are shifting to Internet protocol-based networks.

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