Panasonic may exit smartphone biz

Telecom Lead Asia: Panasonic may exit from phone business. The consumer electronics giant is also exploring an option to find a partner.


Nikkei, top Japanese daily, said Panasonic will slash a significant portion of its mobile phone business as it struggles to make headway in the global smartphone market, dominated by Apple and Samsung Electronics.

Panasonic, which sells mobile handsets in Europe and Japan, is facing sluggish sales in Europe. It will close its mobile phone operations in the region as early as fiscal 2012, according to a Reuters report.

Domestic cell phone sales are also struggling because the firm lagged behind rivals in releasing smart phones.

Panasonic will consider selling the Japanese cellphone business or forming a partnership with another company.

The company has already begun restructuring its business by shutting down its domestic cell phone factory in Shizuoka Prefecture and moving production to Malaysia.

The company sold 5 million smart phones and generated some 130 billion yen ($1.62 billion) in sales from the mobile phone business in fiscal 2011.


The total cost of restructuring the business segment may total 100 billion yen, the Nikkei said.

As of July, Panasonic projected a net profit of 50 billion yen for the current year through March, a turnaround from the previous year’s net loss of some 770 billion yen, it added.

According to data released by IDC on Thursday, Panasonic is not a top player in smartphone segment. According to IDC, Nokia is not in top 5 smartphone vendor list. Samsung, Apple, Research In Motion, ZTE and HTC are the top 5 smartphone makers in Q3 2012.

IDC said the global mobile phone market grew 2.4 percent in third quarter of 2012 (3Q12). Phone vendors shipped 444.5 million mobile phones in 3Q12 compared to 434.1 million units in the third quarter of 2011. Smartphone vendors shipped 179.7 million units in 3Q12 compared to 123.7 million units in 3Q11.

Nokia was replaced by Research In Motion as a Top 5 smartphone player. Nokia lost out due to aggressive selling by Chinese phones vendors such as ZTE and Huawei. Nokia could not make any headway in China.

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