Mitsubishi Electric to exit mobile phone biz

Robert Dow

TOKYO (Reuters) – Mitsubishi Electric Corp said it planned to exit its loss-making mobile phone business, becoming the latest Japanese electronics maker to withdraw from a market dominated by overseas giants such as Nokia.

In the face of tough competition from Nokia, Samsung Electronics Co Ltd) and other global suppliers that enjoy economies of scale, many Japanese cell phone makers have withdrawn to the domestic market in recent years.

It hard to believe but Japan – considered the leader in all things electronic and handy does not have one representative in the top 5 of Mobile handset manufactures. Nokia which has had a strangle hold on the top spot for the better part of a decade is based in Finland, Samsung is based in Korea, The once proud Motorola which has a tenuous hold on the number 3 position in based in the Untied States, The joint venture of Sony-Ericsson is based in the UK and LG in Korea.

Mitsubishi and Sanyo who announced a sell off of its handset unit to rival Kyocera in January were never able to come up with a trend-setting product. Of course, even coming up with a smash hit like the Razr as Motorola did, does not guarantee survival in this cut-throat business. Motorola is also considering dropping out of the market. In this business, you have to create a buzz as Apple has done with the iPhone, or build a loyal fan base as RIM has done with the Blackberry to survive. Still, with over 1.5 billion handsets sold in 2007 the phone business is good business if you can come up with the right product.