Matsushita Communication In-dustrial Co, which expects to post a loss in the year to March, said it will introduce mobile phones with built-in cameras and larger screens to boost sales and return to profit.
Japan's largest mobile-phone maker aims to raise group sales to more than ?1 trillion (US$8 billion) next fiscal year, President Yasuo Katsura said in an interview. The company had sales of ?1.06 trillion and current, or pretax, profit of ?58.8 billion last fiscal year, levels Katsura wants to return to.
Matsushita Communication, hit by product recalls and a failure to penetrate the European market, ceded ground to rivals such as South Korea's Samsung Electronics Co and US-based Motorola Inc this year. The Yokohama-based company may not be able to recoup lost market share unless it can come up with more appealing handsets, some investors said.
"I can hardly imagine Matsushita Communication getting back its leadership position," said Satoshi Kobayashi, a fund manager at Baring Asset Management (Japan) Ltd, which handles about US$4 billion in equities. He is unwilling to buy Matsushita shares unless the company can come up with handsets that appeal to consumers.
Shares in Matsushita Communication have fallen 69 percent since the start of this year, making the stock the third-worst performing among the Nikkei 225 stock index members. The shares today rose 2.3 percent to ?4,400.
Matsushita Communication forecast a loss of ?30 billion on sales of ?844 billion this fiscal year on declining mobile-phone sales. It lost its leadership in Japan to NEC Corp, whose flip-open handsets attracted more consumers. Matsushita's sales suffered as NTT DoCoMo Inc, Japan's largest mobile phone operator, recalled some of its Panasonic brand phones.
Job cuts
The first annual loss outlook prompted Katsura, who took office in June, to cut jobs, shut handset plants in the UK and take other cost-cutting steps. Those restructuring measures should help Matsushita Communication break even next year, even if sales remain unchanged, he said.
The company probably won't reduce more workers beyond the 400 seeking early retirement in Japan and a similar number of job cuts planned in the UK this fiscal year, he said. Katsura's sales and profit goals come ahead of Matsushita Communication completing its budget for next year.
The subsidiary of Matsushita Electric Industrial Co, the largest consumer-electronics maker, is betting on phones featuring a built-in camera and a larger display to attract customers, according to Katsura.
"The trend is definitely shifting to visual phones," he said. "An earnings recovery is dependent on our products that will hit the market starting next spring." Vodafone Group Plc, the biggest mobile-phone operator, asked Matushita Communications to supply advanced handsets, Katsura said. The companies have yet to agree on the types of phones and the size of the order, he said.
UK-based Vodafone picked Nokia Oyj, Motorola and Matsushita Communication to produce phones for its high-speed Internet services, Germany's Der Spiegel weekly reported Sunday. Nokia is the biggest mobile-phone maker, followed by Motorola.
Matsushita Communication currently provides Vodafone with phones using the Global System for Mobile Communications standard, the most commonly used technology in handsets in Europe and Asia.
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