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Japan's NEC says to wind down money-losing smartphone business
July 31, 2013 / 6:28 AM / in 4 years

Japan's NEC says to wind down money-losing smartphone business

TOKYO, July 31 (Reuters) - Japanese IT services provider NEC Corp said on Wednesday it would halt development of new smartphones and restrict its future smartphone business to existing models as it dramatically restructures its business.

NEC’s mobile handset business has faltered as sales of popular smartphones made by Apple Inc and Samsung Electronics Co Ltd boomed over the past decade. It now has barely a 5 percent share of the domestic handset market, trailing Japanese peers such as Fujitsu Ltd and Sony Corp.

NEC’s handset business posted an operating loss of 9 billion yen ($91.8 million) for the April-June quarter, the company said in its first-quarter earnings results on Wednesday.

NEC was in discussions to sell its mobile phone business to Lenovo Group Ltd but a source familiar with the matter has said the talks stalled this month due to disagreements over majority ownership and patents.

NEC cut more than 10,000 jobs last year after posting a combined $1.24 billion in net losses in the 2010 and 2011 fiscal years. This year NEC has received $1.3 billion in funding from a group of lenders including the Development Bank of Japan to help it shed loss-making operations.

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