MADISON, Wis. -- NEC Corp. is calling it quits in the smartphone business, according to a report by Nikkei, Japan's economic journal.
NEC's withdrawal goes against an unmistakable upward trend in the global smartphone market. IHS, a market research company, on Wednesday, July 17, released a new smartphone market report, predicting that worldwide smartphone shipments will reach 1.5 billion units in 2017, up from 712 million in 2012.
The Japanese company's withdrawal is a clear defeat for NEC and its place in the global mobile industry where the changing of the guards has been apparent, with Apple and Samsung taking over and a number of Chinese OEMs rising.
The Nikkei report claimed that NEC had been working on a deal with China's Lenovo since late last year to "rebuild the cellphone business under Lenovo's leadership." Their idea was to emulate the successful relationship the two companies have enjoyed in their collaboration in personal computers.
NEC's Android-based MEDIAS smartphone
The story said that "NEC requested that Lenovo take a majority stake in development and production subsidiary NEC Casio Mobile Communications Ltd." But the two parties could not reach an agreement.
The Japanese company will apparently remain in the non-smartphone segment. Meanwhile, NEC will reassign the bulk of its NEC Casio employees to other groups, the report said.
While it's not clear whether any of NEC's intellectual properties [in the mobile field] might be valuable to others, the Nikkei article added that NEC will continue to consider selling off some cellphone-related patents and may revisit the possibility of a business merger if a potential partner is willing to take a majority interest.