Panasonic Focuses on 3G Handsets

Japan's Matsushita Electric Industrial, owner of the Panasonic brand, announced its plans to stop production of GSM mobile phones and turn their attention to the development of 3G devices. "We've operated GSM manufacturing since 1992, but the situation has become severe due to increasing competition and declining prices", said group president, Yoshiaki Kushiki. The company will now put its efforts into Linux-based 3G handsets; it is already selling such phones in Japan and hopes to reduce costs by utilizing a common platform for its phones worldwide.

As a result of the decision, the company will close its research and development operations at Panasonic Mobile Communications Development Corp. of U.S.A., which has been working on non-Linux platforms. Altogether about 1,400 jobs will be lost though the exact number has not yet been decided. The group estimates the cost of the restructuring to be about 10 billion yen (83 million dollars) and expects benefits of about seven billion yen.

The company hopes to cut these costs by unifying its platforms and core technologies for both Japan and overseas.