Even as Microsoft gets into the handset business with its $7.2 billion acquisition of Nokia’s devices unit, it’s the end of the road for Panasonic. The Japanese electronics giant has been struggling to stay afloat in a rapidly declining consumer electronics industry. In March, Panasonic posted a net loss of $7.46 billion and has lost about $15 billion in the last two years alone.
According to Reuters, Panasonic hopes to transform from a consumer gadget maker to a supplier for other businesses, and, according to a statement issued by Panasonic president Kazuhiro Tsunga, the company plans to weed out any division that fails to meet a 5% operating margin goal within three years. Tsunga, who took over Panasonic a year ago, also predicts that the company’s mobile division would lose more than $11.02 million in the financial year ending in March 2014.
Panasonic now plans to stop the production of consumer smartphones in the Japanese mobile market but will instead outsource production in emerging markets like India.
Last month, NTT DoCoMo Inc, Japan’s largest mobile carrier, conspicuously left out Panasonic from its main winter product lineup and instead chose to feature devices by Sony, Sharp, and Fujitsu. The company had only 7% of Japanese market share last year. Apple, as a point of comparison, had 25%.