Panasonic set to end smartphone development

Panasonic set to end smartphone development

06 AUG 2013

Panasonic is reported to have told Japanese operator NTT Docomo it will not supply any new smartphones, a move which would effectively end its presence in the mobile phone market.

According to reports originating from news service Kyodo, Panasonic’s decision has been driven by Docomo’s strategy of promoting smartphones from vendors such as Samsung and Sony, rather than its domestic partners.

And the move follows shortly after a similar decision from NEC, which is also ending its smartphone development activities.

For many years, the Japanese market was dominated by vendors including Sharp, Sanyo, Sony, Fujitsu, Casio, Mitsubishi, NEC and Panasonic, who created products closely tailored to the market.

Indeed, during this time, international vendors struggled to gain a foothold in the market, with products offered overseas not supporting the features and services expected by Japanese consumers.

But as the market has shifted to smartphones, vendors such as Apple, HTC, Samsung and LG Electronics have been able to gain a foothold in the Asian country, at the expense of the domestic competitors.

Conversely, and despite numerous efforts over the years, the majority of Japan’s device makers have been unable to gain traction in overseas markets, leaving them with dwindling market share and shipment volumes.

Faced with the option of operating loss-making, sub-scale device businesses, vendors have instead opted not to continue competing.

Panasonic identified its Mobile Communications unit as an “unprofitable business” in its Q1 2014 results, with an operating loss of JPY5.4 billion on sales of JPY15.3 billion. This compared with a loss for Q1 2013 of JPY3.7 billion, on sales of JPY17.7 billion.

Last year, Panasonic made an effort to build its smartphone business outside of Japan, although with little success.


Steve Costello

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