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Matsushita Electric Industrial Co. missed its goal of capturing 25 percent of Japan’s cellular phone market because of its late introduction of camera phones, the head of the company’s mobile communications unit said.

Panasonic brand cell phones finished 2002 with less than 20 percent of the domestic market, Yasuo Katsura said in a recent interview.

While that was up 15 percent from the previous year, it was far from the company’s ambitious goal, he said. The company’s worldwide share of mobile-phone sales inched up from 3 percent in 2001 to between 3.5 percent and 4 percent last year.

The missed target may heighten pressure on Matsushita Electric to revamp its mobile-phone business, which NEC Corp. surpassed last fiscal year to become the nation’s largest. Mobile phones accounted for about 10 percent of Matsushita Electric’s 431 billion yen net loss in the year that ended March 31.

Matsushita laid the blame partly on the poor reception of a slim handset model developed for NTT DoCoMo Inc., which debuted in June at about the time DoCoMo began rolling out its first camera-equipped handset. Matsushita had hoped the P504i would lead the recovery of its handset business, Katsura said.

Sharp Corp., which introduced the world’s first cellular phones with digital cameras, developed the camera phone for DoCoMo, Japan’s largest mobile-phone provider. Matsushita’s first Panasonic brand camera phone only reached stores in November.

Relying too heavily on DoCoMo may also be one reason why Matsushita has had a difficult time recouping its leadership of Japan’s mobile-phone market, said Katsura, president of Panasonic Mobile Communications Co., which was established as the company’s mobile communications subsidiary in a companywide reorganization earlier this year.

Because of the lower-than-expected sales in Japan, the unit probably won’t return to the black in the business year ending March 31, Katsura said.

Though he would like to see the unit post a fourth-quarter profit with the aid of higher sales in markets outside Japan, that probably won’t be enough to offset its 10.6 billion yen loss in the first half.

The introduction of camera phones in China and Europe has boosted the unit’s overseas business, he said.

This year, the Matsushita unit will start selling Internet-accessible mobile phones based on DoCoMo’s i-mode technology in the U.S., Europe, China and other parts of Asia.

The company may also provide dual-mode phones, which will have i-mode capabilities in addition to the multimedia messaging system adopted by other operators, including Vodafone Group PLC and China Mobile (H.K.) Ltd., two of the world’s largest carriers.

The company expects the mobile-phone industry to sell between 400 million and 450 million units worldwide this year, little changed or slightly above the 406 million units in 2002.

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