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Mitsubishi leaving cellphone business

updated 03:40 pm EST, Mon March 3, 2008

Mitsubishi quitting cells

Mitsubishi Electric is calling it quits after 25 years in the mobile phone field due to a competitive market and discriminating and demanding consumers, and will focus instead on more general communication-related business, according to the company. Mitsubishi is taking immediate steps, stopping launches of newly developed models and cutting off its supply -- about 2 million phones in fiscal 2008 -- to NTTDoCoMo, Japan's mobile communications giant and the primary cellular carrier in the country.

Following its policy of shifting employees to new positions rather than firing them, Mitsubishi will reposition the approximate 600 employees to its communication infrastructure venture which includes network, security, multimedia and information management businesses, amongh others.

Mitsubishi's latest phones, the 905i and 705i series, included 23 handsets and typically focused on high-end features. The N905i Ecosphere model sported mobile TV, a 5 megapixel camera, 3-inch screen, 3G/GSM roaming, HSDPA, GPS, as well as mobile payment features. The car and electronics giant will still offer after-sales service and honor the recall of its D06 batteries. The move is expected to cost the company 17 billion yen (approximately $163 million) in pre-tax income in the 2008 fiscal year.

The withdrawal marks one of the first strong signs of consolidation in the Japanese cellphone market, which is widely known to be slowing down now that the majority of residents already own cellphones and are primarily replacing older models.

by MacNN Staff




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