Quantcast

Japan’s NEC to pull out of smartphones—report



TOKYO—Japanese electronics giant NEC will likely abandon smartphone production after failing to bring China’s Lenovo Group on board to bolster its money-losing unit, a report said Wednesday.

Shares in NEC rose more than 4.7 percent on the news, despite broad losses on the Tokyo stock market.

The Nikkei business daily said NEC had asked Lenovo to take a majority stake in development and production subsidiary NEC Casio Mobile Communications, but the two parties could not reach an agreement.

Without the extra muscle Lenovo would have provided, NEC believes it will struggle to rebuild the business in a highly competitive market dominated by South Korean giant Samsung and consumer favorite Apple.

The company plans to freeze development of new smartphones and focus solely on conventional handsets, the business daily said, without naming its sources.

Smartphones account for more than half of sales at NEC Casio Mobile, which is saddled with excess liabilities of 60 billion yen ($604 million), the paper said.

Shares in NEC were up 4.76 percent at 242 yen by the lunch break, while the Nikkei 225 lost 0.58 percent.

“Investors are applauding the company’s apparent pullout from the smartphone market, as it was already too late to the field to make a significant impact on the global stage,” said Tatsunori Kawai, chief strategist at kabu.com Securities.

“It’s better for NEC to entirely withdraw from the market, so that it can allocate its resources more effectively elsewhere,” he told Dow Jones Newswires.

NEC refused to confirm the report.

“We are making various considerations as the market is changing rapidly, but nothing has been decided” about the mobile phone business, the company said in a statement.

The Japanese cellphone market had been long dominated by domestic firms but the fast-growing demand for smartphones has given foreign rivals the jump.

NEC, which used to be the top manufacturer controlling more than 27 percent of the Japanese market, is now ranked eighth, with just a five percent share, the Nikkei said.

NEC is counting on continuing demand for flip phones and other conventional handsets including models for elderly people, the paper said, adding that market is doomed to shrink.









Recent Stories:

Gilas Pilipinas tumbles to 3rd straight loss; coach Reyes feels sorry 15 mins elapsed Local consumers prefer ‘brick and mortar’ grocery experience 37 mins elapsed Gilas Pilipinas falls short versus 3rd-ranked Argentina 48 mins elapsed 8 of 10 consumer complaints ‘resolved’ 2 hours elapsed Argentina breaks away with 10-point lead vs Gilas Pilipinas in 3rd quarter 2 hours elapsed FamilyMart eyes 30% market share in PH 2 hours elapsed Bombing at Naia foiled 2 hours elapsed Argentina wipes out 10-point deficit to lead Gilas Pilipinas in 1st half 2 hours elapsed
Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.



Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94
Advertisement Advertisement
Advertisement
Marketplace