Sony Corp. announced Wednesday it will withdraw from the cellular phone business in North America, citing dwindling market share and profits due to intensifying competition.
Sony's cellular business has also been plagued by a defect in about 60,000 cellular units, which emit electric waves that exceed the level set by U.S. regulations, said Tetsuo Kanno, a Sony spokesman in Tokyo.
A recall of the defective products caused Sony to lag behind competitors in releasing new models, another reason for its pullout from North America, Kanno said.
Sony meanwhile will retain research and development teams for a next-generation cellular phone system called cdma2000 (Code Division Multiple Access), which it says is "a promising next-generation telecommunications technology in North America and Japan."
Sony's cellular business in North America, which now accounts for about 40 percent of Sony's worldwide mobile phone business, has reportedly slipped into the red. Kanno declined to comment on sales or income figures in the U.S.
About 200 employees will be affected by the discontinuation of engineering, sales and marketing teams. They will be provided with information regarding opportunities at other units within Sony Electronics Inc., the company said.
Operations and R&D in other areas of the world will be reinforced, including acceleration of R&D for W-CDMA, a set of technologies developed by the NTT group for the next-generation cellular phone, Sony officials said.