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Panasonic joins smartphone race

Posted: 13 Dec 2011 ?? ?Print Version ?Bookmark and Share

Keywords:smartphone market? mobile phone?

Panasonic Corp. is planning to expand its smartphone business in Europe next year. The Japanese firm is one of the latecomers entering the smartphone market primarily dominated by Apple and Samsung.

The global mobile phone market is rapidly shifting to smartphone usage and Panasonic is hoping to cash in on the smartphone trend's steady growth, six years after the company stopped overseas sales of its featured phones.

Apparently, the firm is at odds with its strategy of shifting its focus from consumer electronics to green technology.

Panasonic will first launch its new Android smartphone model in Europe in March 2012 and then later launch the product to the United States and Asia. The company will slowly expand its lineup, aiming at sales of 1.5 million smartphones in Europe next fiscal year.

Yuuki Sakurai, president of Fukoku Capital Management was quoted saying, "It's hard to imagine they can improve profits by making phones. From investors' point of view, it looks as though they are casting around for something else to do after slipping up in televisions. It's not very appealing."

Panasonic announced in October it was slashing its lossmaking TV division, and warned it would post its worst overall net loss in a decade for the year to March, as television prices plunge and restructuring costs balloon.

Even after the smartphone expansion, mobile phones will contribute only a small portion of Panasonic's overall revenues. The company is targeting only a tiny percentage of the growing smartphone market. Market analyst IDC sees the market growing 55 percent to 472 million units this year and reaching 982 million units by 2015.

Panasonic admits that it missed its opportunity to see the market potential of smartphones. It launched its first smartphone models in the domestic market only this year.

"We are well aware of our powerful competitors," said Toshinori Hoshi, head of the company's mobile communications unit. "However, market shares are changing dramatically and if we launch into this fast-changing market, we believe we have a chance of a hit."

The company's new phone features a 4.3in OLED screen and is aimed at businesspeople who are in their 30s and 40s, Panasonic said. The phone will be made at a plant in Malaysia, which already makes handsets for the domestic market.

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