PANASONIC will pull out of the smartphone market in Japan and pare its smartphone operations to outsourced production in emerging markets like India, its president said yesterday.
The electronics company, which has suffered $15bn (£9.6bn) in losses over its latest two financial years, is staking its future on switching from a consumer gadget maker to supplier for other firms.
The architect of this turnaround plan, Panasonic president Kazuhiro Tsuga, has warned he would weed out any division that fails to meet a five per cent operating margin goal within three years. Tsuga told Reuters in an interview that the company’s mobile division was likely to lose more than the ¥1.1bn (£7.5m) targeted loss for the financial year ending next March. Panasonic’s mobile division posted an ¥8.1bn loss last year.
“It’s not acceptable for the company to be bleeding red ink like this, so we have to think about ways to develop assets that we do have in a more effective direction,” Tsuga said.
While the company is stepping back from the consumer smartphone market, it has said it is developing smartphones for business use that would be similar to its popular “Toughbook” PC series.
In 2001, Panasonic was the second-largest handset maker in Japan, after NEC, with more than 19 per cent of the market. Last year, it had a seven per cent share, behind Apple’s 25 per cent.