Panasonic Corporation (TYO:6752) is quitting the smartphone market in Japan and is outsourcing their production. Panasonic president Kazuhiro Tsuga said that the company has set strict guidelines to turnaround the company as well.
Tsuga threatened any division that missed a 5% operating margin goal within three years. Panasonic’s mobile arm is projected to lose over 1.1 billion yen ($11 million) for the incoming fiscal year. The losses were 8.1 billion yen ($81 million) the year before.
“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”, stated Tsuga.
Panasonic Corporation (TYO:6752) is planning to expand on their Toughbook laptop series with smartphones instead of dropping smartphones entirely, according to Engadget. Panasonic got back into the smartphone market in 2011 with the water-resistant Eluga, but was unable to get any carrier support. Panasonic was the second largest smartphone company in Japan in 2001, but now they have less than a 7% share right now.