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Mitsubishi has announced today [pdf link] that, after the current range of cellphones it sells through Japanese carrier NTT DoCoMo, it will no longer manufacturer handsets.  Blaming a saturated market in the country, the company will instead concentrate on hardware for next-generation networks, including transceivers and base stations.

"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" Mitsubishi press release

Aftercare will still be handled by Mitsubishi for existing owners, and the company expects to continue working with NTT DoCoMo only on network infrastructure rather than cellphones themselves.  They predict a shortfall of 17 billion yen ($163m) in pre-tax income for this current fiscal year, although Mitsubishi expect to absorb that loss with improvements in other fields.

Press Release

TOKYO -(Business Wire)- Mar. 2, 2008 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 font-size: 11px; padding-top: 10px; padding-bottom: 10px;">