Panasonic to retreat from consumer smartphones
TOKYO (REUTERS) - Panasonic will pull out of the smartphone market in Japan and pare its smartphone operations to outsourced production in emerging markets like India, the company's president said on Wednesday.
The Japanese electronics company, which has suffered US$15 billion (S$19.2 billion) in losses over its latest two financial years, is staking its turnaround on a transformation from a consumer gadget maker to a supplier for other businesses. The architect of this turnaround plan, Panasonic president Kazuhiro Tsuga, has warned he would weed out any division that fails to meet a 5 per cent operating margin goal within three years.
Mr Tsuga told Reuters in an interview that the company's mobile division was likely to lose more than the 1.1 billion yen (S$14.2 million) targeted loss for the financial year ending next March. Panasonic's mobile division posted an 8.1 billion yen loss last year.
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" notebook PC series. Panasonic is one of several handset makers caught out by the meteoric rise of the two dominant smartphone makers - Apple and Samsung Electronic - which have upended the traditional hierarchy of mobile players.