Nokia to cease handset sales in Japan

Nokia is to stop selling its mobile phones in Japan, except its luxury brand Vertu (pictured). The move comes after the company has struggled to expand its presence in the country.

The company has made the decision despite NTT DoCoMo, Japan’s biggest mobile phone operator, including the new Nokia smartphone in its product line up this month.

Nokia executive Vice President Timo Ihamuotila says the economic downturn means it is no longer sustainable to invest in products for the Japanese market. He adds that the business will now concentrate on research, development and sourcing for the global market.

The Japanese mobile phone market has proved difficult for international mobile handset manufacturers such as Sony Ericsson, Samsung Electronics and LG, as it is dominated by domestic handsets with more advanced applications.

A majority of mobile phones in Japan are part of the 3G network and boast functions such as TV broadcasting and electronic payment options. The Japanese mobile market is close to saturation with 85% phone penetration and retailers see little room for growth.

Nokia holds nearly 40% global market share but according to Japanese newspaper Nikkei the company only took 0.3% of the Japanese market last year.

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