Panasonic retreats from Europe seven months after it arrives

Just seven months ago, Apple introduced its third generation iPad and Panasonic announced it was returning to Europe to sell phones after a seven-year absence. This week, Apple has released its new iPad Mini (with a raft of iPad Mini cases, natch) but Panasonic has rather worse news. Instead of releasing a new phone to follow up the well-received Eluga, Panasonic are about to leave Europe once more.

That’s the word from the Nikkei newspaper, while Reuters are confirming the report with a slightly more measured tone, reporting that Panasonic may withdraw in the next six months. According to the papers, the launch of the Eluga handset was meant to be the push towards a wider global focus, but the strength of the yen and Europe’s poor financial year has made it hard for the company to compete against competitors who are well entrenched and can subsist on much lower margins. The Eluga is now not being produced by any of Panasonic’s Japanese factories, with production shifting instead to Malaysia.

It’s not just Europe that’s proving challenging for Panasonic. The company announced in May that it would be cutting half of its workforce at its Osaka head office and will be facing $1.25 billion of restructuring costs for the rest of the financial year, ensuring that its 2012 returns won’t be anywhere near what they’d like. It’s a disappointing result for the company, which seemed poised to introduce some badly needed features to the European ecosystem - not least of which waterproof phones, which are the trend in Japan but are rare elsewhere.

Image credit: Reg Hardware.

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William Judd has written 52 articles on this blog.

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