Today, Japan-based Mitsubishi Electric said that it will stop making mobile phones. This decision is based on the dull future that the loss-making business is bound to see, according to the company. The mobile phone business is also facing a lot of touch competition.
Further, the company said that Japan’s mobile market has limited room for further growth since most of the residents already own of phone. At the same time, they said, the population is shrinking.
Here is what the company statement said, “Consequently, Mitsubishi Electric’s mobile handset business has recently suffered shipment decreases and it has become extremely difficult to expect an improvement in this field.”
Mitsubishi expects the sales of its mobile phones in the current fiscal year to March to amount to something like 2.1 million handsets, which is worth around 100 billion yen (approximately $970 million).
The company also confirmed that it was not planning any layoffs. However, it is known that around 600 workers in the mobile phone business are to be relocated to other operations.
Mitsubishi Electric is also shifting resources to areas which will offer them much brighter prospects, such as communication infrastructure, home and business security systems and factory automation systems.
The move will however cause a temporary loss of around 17 billion yen resulting from the company’s pretax losses in the current fiscal year to March.