Panasonic can’t stop bleeding red ink and it has no choice but to discontinue businesses that aren’t delivering. The struggling Japanese electronics giant reported a massive net loss of nearly $9 billion in the latest quarter through September. Its shares tumbled 19% on the news, wiping out more than $3 billion off its market capitalization Thursday. The decision to withdraw from the overseas smartphone business comes as Panasonic is trying to streamline its unprofitable operations.
The Japanese company now plans to focus more on competitive businesses such as home appliances like refrigerators and washing machines, as well as rechargeable batteries for electric and hybrid cars.
Panasonic’s brief and failed attempt to become a global smartphone brand is the latest indication of just how far Japan’s status and fortunes have declined in the fast-changing world of consumer electronics. While profits continue to grow at Apple and Samsung on the back of robust sales of their high-end smartphones, Japanese players like Sony Corp. and Panasonic lack any obvious drivers for growth, analysts say.
As Japanese mobile handset makers have little global presence, they are relying almost entirely on their domestic market for smartphone sales. Still, even in Japan where consumers often prefer domestic electronics brands, Apple and Samsung are stealing customers away from local brands.
According to a report released Thursday from Japan’s MM Research Institute, Apple was the biggest smartphone vendor in Japan with a 32.1% share by shipment for the six months through September Fujitsu Ltd. followed with a 16.9% share and Sony came third with a 11.7% share, slightly ahead of Samsung’s 10.7% share.
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