Fujitsu on Friday confirmed it was in talks about selling its mobile phone business to investment fund Polaris Capital Group, although no final decision has been made yet.
The news was first reported by the Nihon Keizai Shimbun (Nikkei) and Yomiuri Shimbun.
Fujitsu said that the specific reports were not based on any official announcement made by Fujitsu, but confirmed that it was in discussions with Polaris Capital Group Co., Ltd.
The sale would leave just three Japanese electronics makers - Sony, Sharp and Kyocera - in a global market dominated by Apple, Samsung Electronic and Chinese rivals.
According to the reports, Tokyo-based Polaris Capital will take a majority stake in Fujitsu's mobile phone unit, which is valued at around 40 billion yen to 50 billion yen ($365 million to $456 million).
Polaris will aim to list the business in several years, the Yomiuri newspaper reported.
Domestic makers such as NEC Corp and Toshiba Corp have failed to gain a global presence by being overly reliant on the lucrative Japanese market, which gave them little incentive to change their Japan-specific mobile phone formats and expand overseas.
Last year, Lenovo Group agreed to buy a majority stake in Fujitsu's personal computer unit for up to $269 million.