Matsushita Electric is to scale back its overseas mobile phone operations and cut more than 1,000 jobs. The Japanese maker of Panasonic branded products predicted a restructuring benefit of 7 billion yen (approx. U.S. $77 million) from the decision.
Matsushita will stop making current-generation mobile phones for overseas markets. Its resolution follows earlier decisions by other Japanese handset makers to trim overseas operations. Toshiba has pulled out of China and Mitsubishi Electric has scaled back in Europe.
Matsushita said it would close plants in the U.S. and the Philippines. But it would still persevere abroad with third-generation mobiles.
Analysts had criticized the design of Matsushita's overseas mobiles, and questioned its commitment to success, given relatively low advertising expenditure.
The company will retain plants in Britain and China, which will concentrate on third-generation phones. Matsushita's failure in the current-generation mobile market raises questions about its long-term mobile strategy.
Competition is fierce in the Japanese market, with a large number of producers and falling prices.
Japan's mobile phone manufacturers have responded by seeking business outside the country. The failure of Matsushita in overseas markets raises doubts about this as a long-term strategy.
However, Japanese companies may have a competitive advantage in the third-generation market. Almost half of Japan's mobile consumers use third-generation networks, whereas most other countries are in the early stages of 3G. (The Australian)
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