NEC has decided to exit the smartphone business entirely
There was a time when NEC was the 500 lb. gorilla in Japan’s cellphone market with a 27% market share—then came smartphones. Faced with competition from the likes of Apple and Samsung, NEC’s share quickly shrunk to a measly 5%; after spending six months unsuccessfully trying to negotiate a partnership with China’s Lenovo, the company has decided to exit the smartphone business entirely, according to a report by the Nikkei newspaper.
Japan’s smartphone market is brutal, dominated by fickle mobile carriers and fad-chasing consumers. As in the rest of the world, it is also intensely competitive: In addition to Apple and Samsung, there are five homegrown firms—Sony, Fujitsu, Sharp, Panasonic, and Kyocera—who are vying for a spot in users’ pockets.
Still, Japan once had ten handset makers before the relentless economics of smartphones winnowed the crowd. And NEC (which will reportedly keep making non-smartphones for Japan’s elderly) won’t be the last firm to bow out. Who’s next? Well, JP Morgan analyst Alvin Kwock said in a note this week that Taiwan’s struggling smartphone vendor HTC may be forced to consider being acquired by the Chinese mobile telecommunications equipment maker Huawei to survive.