On August 1, Beijing time, according to foreign media reports, NEC announced on Wednesday that the company will stop developing new smartphones and fade out of the smartphone market. The company ’s smartphone business will be limited to existing products in the future.
NEC announced to fade out of the smartphone market and stop developing new products
NEC Chief Financial Officer Isamu Kawashima said: "We entered the smartphone market late and have been unable to develop attractive products, so we decided to fade out of the smartphone market."
NEC is said to have negotiated with Lenovo and it hopes to sell its smartphone business to Lenovo, but the negotiations between the two parties broke down earlier this month and failed to reach a deal.
In addition to the smartphones already on the market, NEC will immediately stop developing, producing and selling new smartphones. NEC will continue to provide support for existing smartphone products. NEC's current share of the Japanese mobile phone market is only 5%, lagging behind other Japanese manufacturers such as Fujitsu and Sony.
This shows that NEC has not completely withdrawn from the mobile field. It will continue to develop and produce feature phones and tablets. NEC said in its first fiscal quarter report on Wednesday that the company ’s mobile phone business had an operating loss of 9 billion yen (approximately US $ 91.8 million) in the April-June fiscal quarter.
Although NEC used to be Japan's largest mobile phone manufacturer, it has never established a firm foothold in the US market. NEC merged its mobile phone business with Casio and Hitachi in 2010. NEC recently released Casio G'zOne Commando and NEC Terrain based on the Android system, which were handed over to Verizon Wireless and AT & T, respectively.
NEC's total net losses in fiscal year 2010 and fiscal year 2011 reached $ 1.24 billion, and it laid off more than 10,000 employees last year. This year, NEC has received $ 1.3 billion in investment from lending banks, including the Japan Development Bank.
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