Panasonic pulls Euro smartphone after just a year

Horse, barn door scenario as losses mount

Panasonic has become the latest Japanese tech giant to fall on hard times, announcing projected losses for 2012 of ¥765bn (£5.9bn) and a hasty decision to pull out of the European smartphone market after just a year.

The firm persuaded four Japanese banks to loan it ¥600bn (£4.7bn) after announcing a record loss of ¥772.1bn (£6bn) in the last fiscal year.

However, it looks to be on track for an even worse year in 2012, announcing that losses would likely hit ¥765bn in the financial year ending March 2013. Shares fell by nearly 20 per cent on Thursday on the back of the financial gloom.

Panasonic’s efforts to arrest the slide have not been helped by a poorly performing Sanyo, the firm it spent ¥670bn (£5.2bn) to buy in 2009 in the hope its solar battery business would be a money-spinner.

Its consumer electronics sales have also been hit in China by the nationalistic boycott of Japanese goods by many buyers in the aftermath of Tokyo’s decision to purchase a disputed set of islands in the East China Sea.

More embarrassing still for the firm was the revelation it will be pulling out of the European smartphone market less than a year after it announced it would be selling its devices outside of Japan for the first time.

Panasonic president Kazuhiro Tsuga admitted at a press conference that the firm had misjudged the international smartphone market.

“We believed that we would be able to make profits by selling uniform smartphones around the world, but we now realise that Japanese consumers are seeking functions that are unique to the local market,” he said, according to the Asahi Shimbun.

“We cannot expect synergy of our smartphone business [between Japan and Europe].”

Panasonic’s name will be added to that of Sharp, Sony, NEC and other once proud Japanese tech titans which are struggling to stay relevant, and profitable, in the industry they find themselves in today.

In the smartphone space especially, Japanese handset makers have historically struggled abroad, while foreign rivals such as Apple and Samsung have begun to erode their share at home. ®