Reuters reports that Nokia – the world’s largest handset manufacturer – is to stop selling mobile phones in Japan, except for its luxury Vertu brand, after struggling to compete with domestic vendors. “In the current global economic climate, we have concluded that the continuation of our investment in Japan-specific localised products is no longer sustainable,” Nokia executive vice-president, Timo Ihamuotila, said in a statement. He added that Nokia’s Japanese business would concentrate on research, development and sourcing for the global market as well as specific projects such as its Vertu brand. Although the Finnish vendor enjoys a dominant 38 percent global share of the world’s mobile phone market, it took only around 0.3 percent of the Japanese market last business year, according to the Nikkei newspaper. All ‘Western’ vendors have struggled in Japan, with the country’s handset market dominated by domestic suppliers such as Sharp, Panasonic and Kyocera.

According to Wireless Intelligence, Japan is the world’s seventh-largest mobile phone market, with a penetration rate of 82 percent. Japanese mobile operators NTT DoCoMo and Softbank Mobile currently offer Nokia handsets. Nokia’s decision comes only days after it was reported that the company is to launch its own MVNO in Japan next year, targeting wealthy Japanese customers via its Vertu-branded luxury phones that feature jewels and precious metals and retail for between JPY1.6 million and JPY5 million (US$17,000 to US$52,000). The handsets also feature a ‘concierge key’ that enables access to an around-the-clock personal assistant to help with travel, dining and entertaining arrangements.