NEC dumps smartphone business (but will keep making tablets)

NEC has pulled out of the smartphone business, conceding that it has been left behind in the highly-competitive segment, and announcing an immediate cessation of development, manufacturing, and sales of the devices. The Japanese company will continue to make dumbphones, however, along with tablets, but "handset shipments are following a downward trend and it is difficult to foresee improved performance in the future" in its smartphone business, NEC concedes.

The majority of NEC Casio Mobile Communications employees currently working on smartphone projects will be shifted to other parts of NEC's firm, as the company now focuses on other uses of mobile tech. "Going forward," the firm said in a statement, "NEC will capitalize on the technologies and know-how acquired through the development of wireless communications, terminals and human interfaces for the mobile phone handset business in order to strengthen its Social Solutions Business."

That includes pushing cloud technology in enterprise and medical settings, as well as biometrics for security, and video surveillance systems. NEC also has a footprint in smart-grid systems, adding intelligence to power networks so as to better manage energy supplies.

"NEC is ending the development, manufacturing and sale of smartphones, other than models already on the market. NEC will continue providing maintenance and support services for its existing smartphones. NEC will also continue developing and producing conventional mobile phone handsets" NEC

NEC's struggles to compete with smartphones have developed over some time. The company was strong in the Japanese market, but has seen increasing competition there from Sony, Samsung, LG, and others; meanwhile, attempts to engage the broader market with slimline phones like the 2011 MEDIAS E-04C, at just 7.7mm thick, failed to capture the public imagination.

Rumors back in March suggested Lenovo was a potential suitor for NEC's phone business, but a deal failed to materialize. Back in 2011, the two firms had hinted at a potential collaboration in mobile devices.

Existing smartphones will be supported moving forward, but R&D on new models has ceased as of this week. NEC is yet to calculate what potential impact the decision will have on its 2014 financial year results.