Panasonic planning European smartphone market exit, less than a year after its return

Panasonic could be planning to withdraw from the European smartphone market, despite only having rejoined at the beginning of the year. Poor sales are cited as the reason, but a lack of effort and financial problems could be closer to the mark.

A new report indicates Panasonic is considering withdrawing its range of phones from Europe, despite only having re-entered the market at the beginning of the year.

Having previously left Europe in 2005, so it could concentrate on sales at home, Panasonic announced its return in February, and showed off its new handsets during Mobile World Congress. A Reuters report says it wanted to sell 1.5 million phones this year, but it’s unlikely to reach this figure, prompting talk of a withdrawal.

It placed its hopes on two phones, the Eluga and the Eluga Power. The former is an Android 2.3 Gingerbread phone with a 4.3-inch touchscreen, and a 1.2GHz, dual-core Texas Instruments processor. Despite boasting a slim, 7.8mm chassis and an attractive, waterproof body, this specification barely provided the phone with the power to compete with devices from Samsung, Apple and HTC.

The Eluga Power could have been a bigger success, as it has a 5-inch, high definition touchscreen, a dual-core Snapdragon S4 chip, Android 4.0 and IP57 water and dust proofing. A true competitor to the Galaxy Note, then.

Both phones could be purchased through online retailers, but Panasonic never appeared to sign any deals with UK networks. While this isn’t quite as important as it is in the US, it would have been essential for Panasonic to re-connect with buyers and promote its new phones.

Evidence of trouble brewing came when the firm told TechRadar.com in August that it was selling its two phones “to consumers in Germany and Italy and currently does not have any plans to change this.” A report in The Times around the same time said Panasonic had put its European smartphone plans on hold, and “looked likely to abandon its mass market ambitions.”

The smartphone market is tough, but Panasonic’s potential exit could be directly related to the $7.6 billion bailout given to it by Japanese banks this month after record losses, rather than any failure to perform following its half-hearted attempt to break back into Europe.