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Flat speakers from NXT, the UK audio technology company, are to be used in a mobile phone made by Toshiba and sold by Vodafone KK, the Japanese subsidiary of Vodafone that has more than 15m customers.

The phone, launched next month, will be the second to hit the Japanese market this year. In February NTT DoCoMo, which has 49m customers in Japan, launched the first model to make use of the flat speaker.

The company said several hundred thousand phones using its technology had so far been sold by NTT DoCoMo. However, royalty income from each sale would be below the average $0.57 that NXT makes from royalties on larger equipment, such as personal computers and audio systems.

NXT pioneered the technology that enables flat panels, such as the display screens on mobile phones, to be used as loudspeakers. It has appointed numerous licensees with royalty agreements, but products using the technology have been slow to reach the market.

Peter Thoms, chief operating officer, described the Vodafone move as “a significant underlining” of proof that the technology works for mobile phones.

The shares, which were priced at 60p for a placing that raised £2.5m ($4.5m) a month ago, rose 13p to close at 78½p.

Both David Pearson, chief executive, and Gordon Owen, chairman, resigned at the time of the placing.

Alex Jarvis, analyst at KBC Peel Hunt, has over the past few months expressed concerns about the company's cash position. She has maintained a sell recommendation on the stock in spite of Thursday's announcement.

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