Matsushita decided to withdraw from the highly competitive and unprofitable GSM business to focus on 3G and 4G phones. They will also switch from Symbian-based to Linux-based phones.
Panasonic Mobile is the second largest Japanese supplier after NEC. It was the eighth-ranked global supplier last year.
Panasonic Mobile recorded a ¥8.9 billion (about $74 million) operating loss last fiscal year. The first half of this fiscal year ended in September with a loss of ¥1.9 billion (about $17 million), mainly due to poor GSM business in Europe and China.
Panasonic holds about about 30 percent of the world 3G market, a spokesman claimed.