Panasonic to resume mobile phone business in RP by 2008

Consumer electronics giant Matsushita Electric – known for its flagship Panasonic brand – will resume its mobile phone business in the Philippines by 2008 or earlier as it goes full blast in the production of 3G-capable handsets, top company officials said.

Panasonic Mobile, the wireless unit of the Japanese conglomerate, shut down its Philippine manufacturing plant in Sta. Rosa, Laguna last March 31, citing "severe global competition" in the erosion of its market share in mobile phone sales.

In addition to its Philippine factory, Panasonic also closed facilities in the US and Czech Republic while re-aligning operations in China and Britain.

Panasonic Mobile Communications Corp. of the Philippines (PMCP) president Reynaldo Lico said the plant closure, which affected 842 employees, was a result of the parent firm’s decision to phase out the production of their 2.5G phones and instead venture ahead into 3G or third generation technology, which allows video calls, TV broadcasts, and high-speed Internet browsing.

"The biggest reason why we decided to shut down our factory is that our 2.5G mobile phones were globally defeated by our competitors," Lico said. "If we continue our operations, we would surely get deficits, then we would not be able to pay enough compensation to our employees."

"We decided to close down our plants, but we still believe our employees are our ‘treasure.’ It is very sad to say goodbye to them, but we would like to compensate them as much as possible and try to help them find new jobs," said Yoshihiro Matsukawa, director of corporate communications at the Singapore-based Panasonic Asia Pacific Pte. Ltd.

Panasonic only has about two percent of the global phone market, which is dominated by Nokia, Motorola, Sony Ericsson, and Korean brands LG and Samsung.

"In the current GSM market, which is dominated by several major brands, it is very difficult for Panasonic to stay competitive in the Asia-Pacific market. It is more appropriate for Panasonic to focus on the future mobile phone platform after GSM," Lico said.

But he pointed out that as soon as their Japanese parent completes the development of their 3G and higher technology phones, Panasonic will re-activate its manufacturing operations in the Philippines, although they have yet to decide on where to put up the new plant.

"With newly-developed 3G products, Panasonic would surely contribute anew to the Philippine economy," Lico said.