Panasonic Mobile Bows Out

11th December 2005

Panasonic Mobile have announced that they are to cease production of GSM handsets from January 2006 and concentrate on 3G handsets. Also, they will cease development on the Symbian platform and concentrate on a Linux-based solution for their phones.

We've been speculating about the demise of Panasonic's mobile operations since last year. Indeed, our prediction for 2005 was that "Panasonic will pull out of the mobile market outside of Asia during 2005". In the event, Panasonic have just pulled out of the GSM market, but since their current 3G range in Europe consists of nothing at all, then there will have no products whatsoever until their 3G handsets come into production.

Panasonic's catalogue of woes in the GSM market is quite lengthy. For example, the Panasonic X700 took 11 months from announcement to launch and immediately ended up in the remainder bin, despite the fact that it was an interesting, compact smartphone, but badly let down by poor marketing and lateness to market. The Panasonic Z800 was a so-so 3G phone that never even got to prototype stage before being canned. The Panasonic X300 had a novel flip-out viewfinder, but was such a poor handset from a technical perspective that it didn't sell. A slim ray of hope came in the Panasonic VS series which featured a well regarded high-resolution and very bright display and a quite attractive design, but tended to lack things like expandable memory or Bluetooth. We recently looked at the Panasonic VS6 and concluded that the main attraction with the phone was that it was cheap, rather than technically advanced.

Although Panasonic announced many handsets over the past two years, only a fraction ever made it to market, and most of those that made it to market flopped. Panasonic seemed to be determine to shift product, but the price quoted for the VS6 was so low that it was obvious that these units were being sold at a loss. This is no way to run a business, so in our view it was only a matter of time before Panasonic pulled the plug.

So.. what next for Panasonic? They must surely have in mind fellow Japanese rivals such as Sharp (with the Sharp 903) and Toshiba (with the Toshiba TS921) who concentrated on 3G phones outside of Japan. Panasonic do at least have a couple of things going for them - the latest VS series of handsets have excellent screens and pretty good industrial design. And it is surely better to sell a smaller number of handsets for a profit in an expanding market (i.e. 3G) rather than a large number of handsets for a loss in a market that eventually will decline (i.e. GSM), so at least Panasonic's reasoning seems sound.

We hope that this isn't really a case of "goodbye" from Panasonic, more "see you later". Certainly, Panasonic have the capabilities of making a success of this, if only they can concentrate on what they're good at rather than churning out second-rate bargain mobile phones. 

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