Mitsubishi Electric to Terminate Mobile Handset Business and Strategically Shift...

Mitsubishi Electric to Terminate Mobile Handset Business and Strategically Shift Resources to Strong Businesses

TOKYO--(Business Wire)--
Mitsubishi Electric Corporation (President and CEO: Setsuhiro
Shimomura) announced today that the company has decided to no longer
continue its mobile handset business in Japan in order to
strategically shift resources to the communication-related business
and other businesses the company plans to strengthen. This decision
has been made with a view to further accelerate the company's growth
strategy under the management policy of "making strong businesses
stronger."

1. Mitsubishi Electric to Terminate Mobile Handset Business

Mitsubishi Electric started supplying car phones in 1983 to Nippon
Telegraph and Telephone Public Corp. and since then, the company has
been involved in the mobile handset business in Japan, with the recent
products supplied to NTT DoCoMo, Inc. (hereafter "NTT DoCoMo.") It has
become difficult these days, however, to expect growth in demands for
the already matured domestic mobile phone market, with the
increasingly diverse preferences of consumers leading to severe
business conditions. Consequently, Mitsubishi Electric's mobile
handset business has recently suffered shipment decreases and it has
become extremely difficult to expect improvement in this field.

Under these circumstances, Mitsubishi Electric has considered the
course of action involving the mobile handset business from every
aspect and decided to no longer continue the business. The company
will strategically shift its resources to other businesses the company
plans to strengthen, thus continuously boosting the company's business
performance and further increasing its corporate value.

Mitsubishi Electric will therefore stop launches of newly
developed models after the current models supplied to and sold by NTT
DoCoMo.

Even after the business restructure, however, we will continue
after-sales-service as well as the recall of D06 lithium batteries
(announced in Japan on Dec. 7, 2006).

Meanwhile, Diamondtelecom, Inc., which is a mobile phone sales
dealer and a subsidiary of Mitsubishi Electric, will continue and work
to further expand its business.

Mitsubishi Electric will also work to maintain and further
strengthen the partnership with NTT DoCoMo through the communication
related business we aim to expand.

Summary of Mitsubishi Electric's Mobile Handset Business

1) Shipment forecast of approximately 2.1 million handsets in
fiscal 2008 (April 1, 2007-March 31, 2008).

2) Sales forecast of approximately 100 billion yen in fiscal 2008.

3) Approximately 600 employees, including R&D, manufacturing and
sales divisions. These employees are basically to be repositioned
mainly in Mitsubishi Electric's strategic businesses.

2. Mitsubishi Electric to Strategically Shift Resources to Strong
Businesses

Mitsubishi Electric will strategically shift resources of the
mobile handset business to fields that can make best use of its
technologies and know-hows, and is also expected to show further
development and expansion. For example, the company plans to
strengthen its businesses in the following fields: the communication
infrastructure business which involves next generation network (NGN)
related equipments and base transceiver stations for mobile phones, as
well as closed circuit televisions (CCTVs) and other total security
businesses, car multi-media business, factory automation system
business, train information management systems business and others.

With the shift of resources, Mitsubishi Electric will strengthen
mainly the Communication Systems Group and other business Groups that
involve the communication-related business, which is expected to show
continuous development in technologies. The company will also utilize
the assets accumulated through the mobile handset business for our
strong businesses, thus further accelerating the company's growth
strategy.

3. Forecast for Fiscal 2008 (April 1, 2007-March 31, 2008)

The company's decision will cause a temporary loss of
approximately 17 billion yen in income before income taxes for fiscal
2008. Although the forecast for fiscal 2008 may be assessed after the
undergoing review of each business, Mitsubishi Electric expects to
absorb the temporary loss with improvements in various fields.

About Mitsubishi Electric

With over 80 years of experience in providing reliable,
high-quality products to both corporate clients and general consumers
all over the world, Mitsubishi Electric Corporation (TOKYO:6503) is a
recognized world leader in the manufacture, marketing and sales of
electrical and electronic equipment used in information processing and
communications, space development and satellite communications,
consumer electronics, industrial technology, energy, transportation
and building equipment. The company recorded consolidated group sales
of 3,855.7 billion yen (US$ 32.7billion(a)) in the fiscal year ended
March 31, 2007. For more information visit
global.mitsubishielectric.com

(a) At an exchange rate of 118 yen to the US dollar, the rate
given by the Tokyo Foreign Exchange Market on March 31, 2007

Mitsubishi Electric Corporation
Investor Relations Inquiries:
Corporate Finance Division
Tel: +81-3-3218-2391
Cad.Irg@rk.MitsubishiElectric.co.jp
Media Contact:
Yurika Fujimoto, +81-3-3218-3380
Public Relations Division
prd.gnews@nk.MitsubishiElectric.co.jp
here

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