Panasonic throws in the towel on smartphones altogether

Panasonic throws in the towel on smartphones altogetherPanasonic has long since given up on the smartphone biz in Europe, and now it's officially pulled the plug on its mobile operations in Japan.

It's all part of the company's efforts to evolve its operations and survive on the back of several years of big losses.

Panasonic has never really been much of a player in the smartphone game here in the UK, but even when its big push back into Europe with the ill-fated Eluga line a couple of years ago ended in utter failure, it still retained a decent foundation of support over in Asia.

But no more, it seems. Panasonic has lost $15bn over the past two financial years, while the company's mobile division lost more than $80m last year and is expected to post a further $11m loss over the current financial year ending next March.

And with new company pres Kazuhiro Tsuga promising to cut any division not hitting a 5% operating margin within three years, it's game over for mobile, it seems.

Panasonic's share of the smartphone market has dropped from 19% in 2001 to just 7% last year. According to Reuters, the “knockout blow” was DoCoMo's decision to promote only the Sony Xperia Z and Samsung Galaxy S4 over the summer, leaving Panasonic out in the cold.

“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 yesterday.

Panasonic will now outsource device production in major emerging markets like India, and continue its evolution from a consumer gadget maker to a supplier of components to other businesses.

In the bigger scheme of things, Panasonic is simply the latest victim of the increasing concentration of power in the mobile industry with just a few companies. Nokia and Motorola have been swallowed up by bigger tech firms, Palm and Panasonic are both now gone, and you can't see HTC and BlackBerry surviving much longer if things carry on like they are now. Fun times.

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