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Matsushita Pulls Out of Low-End Phones
Nov 22, 2005
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Matsushita Electric Industrial, which sells electronics under the Panasonic brand name, said it is dropping out of the low-end handset market to maintain profits, representing the end of its partnership with local handset manufacturers.

The company's move came as bigger rivals Nokia Oyj and Motorola Inc. continue their battle selling low-priced cellular phones in a race to become the world's top handset brand.

"Our new strategy involves shifting to the high-end market in order to make a profit. Right now, you can hardly see any low-end Panasonic phones on the market," said Chen Shih-chang, the new chairman of Matsushita's local unit, Panasonic Consumer Sales (Taiwan) Co. "We cannot compete with our rivals at the low-end of the market."

He said it would be a challenge for his company to hit its target of NT $4 billion (approx. U.S. $119 million) in revenue this year. High-end mobile phones, or those priced higher than NT $10,000 (approx. $298) per unit, account for about 15 percent of the total annual sales of 5 million units in Taiwan, according to Shih-chang. He said his company stopped selling medium and low-end models during the first quarter of this year after completing contracts with both Quanta Computer Inc and Compal Communications Inc.

In other news, Shih-chang, who is also the chairman of home appliances unit Panasonic Taiwan Co, said Matsushita is aiming to grab top position in Taiwan's plasma display panel (PDP) TV market next year, targeting LG Electronics Inc.

Matsushita, which has the lead in Taiwan's LCD TV market, is scheduled to launch the first batch of 42-inch PDP TVs made in cost-saving Taiwanese plants next month, Shih-chang said.

The move will see the price for a 42-inch PDP TV drop dramatically to NT $89,900 (approx. $2,676), compared to more than NT $140,000 (approx. $4,167) for a similar model imported from Japan, he said. (Taipei Times)

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