Panasonic has confirmed its plans to stop smartphones sales in Japan as well as outsource production of handsets for sale in other countries to emerging economies including India.
According to Panasonic President Kazuhiro Tsuga, any of the company's units would be decommissioned after failing to meet a 5% operating margin goal in three years.
Tsuga was cited by Reuters as saying that the Japanese firm's mobile division was about to report a loss over JPY1.1bn ($11m) for the financial year ending March 2014.
"It's not acceptable for the company to be bleeding red ink like this, so we have to think about ways to develop assets that we do have in a more effective direction," Tsuga said.
The latest move makes Panasonic the second Japanese firm to pull out of the sector, following NEC's plans to shut down its smartphone operations after negotiations to sell the unit to Chinese firm Lenovo got stuck.
Panasonic is also one of several smartphone makers left out of competition dominated smartphone makers including Apple and Samsung Electronics.
Recently, Microsoft also agreed to acquire Nokia's phone business, patents and mapping services for $7.2bn (£4.6bn) to boost its mobile devices' market share.
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