As anticipated, NEC said it will end the development, manufacturing and sale of smartphones, noting that its “mobile phone handset shipments are following a downward trend and it is difficult to foresee improved performance in the future”.

Interestingly, the company said it will “continue developing and producing conventional mobile phone handsets”, although how much of an opportunity remains in the shrinking feature phone market is open to question. It will also continue operating its tablet business.

NEC said that “as the market for mobile phone handsets, including the rapid spread of smartphones, has dramatically change, economies of scale have become increasingly important for the maintenance and strengthening of competitiveness”.

As the Japanese smartphone market has been transformed by the increased presence of international players such as Apple, Samsung and LG Electronics, the country’s domestic manufacturers have not been able to offset this by growing their presence overseas.

For example, Panasonic has announced several devices for international markets in recent years, having failed to generate traction overseas in its earlier efforts, while Fujitsu is looking to offer its devices for “senior” users outside of Japan.

NEC was previously linked with a joint handset venture with aggressive Chinese vendor Lenovo, as a way for it to reduce its exposure to this segment and benefit from the scale delivered by its fast-growing potential partner.

However, these talks never came to fruition.

NEC said it will “reposition” employees of its NEC Casio Mobile Communications venture, except for those in certain roles. NEC Casio is 71 per cent owned by NEC, 20 per cent by Casio, and 9 per cent by Hitachi.