Toshiba Quits China

April 6, 2005 - source: BWCS

In a surprise move, Japan's Toshiba Corporation has announced it is to pull out of the Chinese mobile market. Just as its rivals have begun circling ever more hungrily over the burgeoning sector, hoping to pounce on the long-promised 3G pickings, Toshiba has decided to sell its 33% stake in a local mobile company and concentrate on its domestic and European operations.

The Japanese company set up a joint venture with Nanjing Putian in Hong Kong in 2000 and began to sell Toshiba branded handsets in mainland China. However, the venture has been plagued by what the Japanese company described as "slower-than-expected" sales of its high-end mobile phones. Toshiba has not ruled out a return to China in the future, but for the moment it will turn its attentions to the richer pickings to be had in Europe where demand for its 3G handsets appears to be growing.

Toshiba's decision appears to fly in the face of its rivals' keenness to carve out niches for themselves in China. The company, which is the second largest conglomerate in Japan, may risk being left behind at just the moment when the Chinese market receives another considerable boost with the expected announcement of 3G licence terms later this year.