HANGING UP

Another once high-flying Japanese cellphone maker is calling it quits

The sun is setting on Japan’s consumer electronics industry, as yet another world-renowned brand tries to shed off an important business unit.

Yesterday the Nikkei business daily reported that (paywall) Fujitsu is looking to sell off its mobile phone unit as early as next month. Potential buyers include Lenovo and Foxconn, two electronics makers with firm roots in China. Such a sale signals the continued hollowing out of the country’s global electronics brands.

Signs of a possible sale first emerged in late 2015, when the company announced plans to spin off its “Ubiquitous Solutions” unit, which includes both smartphones and personal computers and accounts for 21.5% of Fujitsu’s total revenue. It did so successfully in 2016.

As a cellphone maker, Fujitsu has never been a major global player. But along with domestic rivals it thrived in Japan in the late 1990s and early 2000s, when the nation, with its then-advanced cellphones, was considered well ahead of other markets. Industry insiders visited Japan to study the success of the cellphone makers and mobile internet services like NTT DoCoMo’s i-mode, which offered games, email, location services, social networking, and other features now taken for granted. In 2000, Fujitsu’s then-chairman Tadashi Sekizawa proclaimed that Japan, with its first-mover advantage, would lead the mobile Internet era.

That didn’t happen. Apple introduced the iPhone in 2007, and things have gone steadily downhill from there. In the years since, the Nikkei notes, Panasonic, NEC, and Mitsubishi have all exited the cellphone-making business. Taiwan’s Foxconn, which makes iPhones, bought Sharp and its cellphone division outright last year. Toshiba’s cellphone unit is now a part of Fujitsu. That leaves, aside from Fujitsu, just Sony and Kyocera still standing from the glory days.

Last year Fujitsu commanded a bit over 7% of Japan’s handset market share, down from more than 17% at its peak four years earlier. Back then it was even ahead of Apple, which now easily dominates the market.

Fujitsu’s anticipated exit from handsets coincides with several other major selloffs from Japanese companies. Toshiba is currently looking for a buyer for its semiconductor division, the crown jewel of the conglomerate. When Sharp sold itself to Foxconn last year, it gave the Taiwanese manufacturer a valuable brand plus some of the world’s best display technology.

As for the survivors of Japan’s once-renowned cellphone sector? Kyocera is little-known, and Sony’s cellphone business, while it’s made some inroads overseas, is nearly irrelevant compared to profits generated by other units, including those involved in insurance and video games.

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