Japan's NEC has revealed plans to exit the smartphone business in the face of declining shipment volumes.
The vendor yesterday announced the results of a strategic review into its mobile device business NEC CASIO Mobile Communications.
NEC will cease the development, manufacturing and sale of new smartphones, while maintaining maintenance and support services for existing devices.
But the company will continue developing and producing feature phones and tablets for the Japanese and international markets.
Explaining the decision, NEC said the handset market had changed to the extent that economies of scale are vital for competitiveness. “However, NEC's mobile phone handset shipments are following a downward trend and it is difficult to foresee improved performance in the future.”
As part of the restructure, employees of NEC CASIO will be repurposed to support the company's Social Solutions business.
Japanese mobile phone players have been consolidating in the face of competition from Apple, Samsung and others. Sanyo, Toshiba and Mitsubishi have all pulled out of the market in the last five years, mostly through M&As with rival vendors.