NEC Corp. said Wednesday it is withdrawing from its money-losing smartphone business due to dropping sales and lack of competitiveness with rivals.

NEC said it has ended the development, manufacturing and sales of new smartphones, adding it will continue to sell and provide maintenance for models already on the market as well as conventional mobile phones.

NEC had failed to persuade Chinese computer maker Lenovo Group Ltd. to buy a majority stake in its mobile phone subsidiary, NEC Casio Mobile Communications Ltd., which has a negative net worth of about ¥60 billion.

Its smartphone sales dropped especially as Japan's top mobile phone carrier, NTT DoCoMo Inc., started increasing discounts on smartphones made by Sony Corp. and Samsung Electronics Co.

NEC said it will utilize resources at NEC Casio Mobile Communications to focus on its social infrastructure business.