Page last updated at 12:29 GMT, Thursday, 27 November 2008

Nokia to end phone sales in Japan

Nokia phone
Nokia failed to grow its share of the Japanese market enough

Finnish mobile phone giant Nokia has said it will stop selling its handsets in Japan after struggling to grow its market share in the country.

Nokia said it would continue selling its luxury Vertu brand in Japan, and would dedicate its Japanese business to research purposes.

Samsung and LG have also faced problems in Japan - a market dominated by sophisticated domestic phones.

Nokia said recently that it would cut costs because of the global downturn.

"In the current global economic climate, we have concluded that the continuation of our investment in Japan-specific localised products is no longer sustainable," said Nokia executive vice president Timo Ihamuotila.

Nokia has nearly 40% of the global market for mobile phones, but it reportedly managed to take only 0.3% of Japan's market last year.

Tough market

According to research firm IDC Japan, foreign companies account for only 5% of the Japanese market, which is dominated by local firms selling phones with features such as TV broadcasting and electronic payment functions.

Japanese manufacturers have only a small presence outside their home market, which also has an advanced third-generation network that makes it difficult for foreign firms to compete.

The Nokia-owned luxury brand Vertu was created in 1998 and focuses on one-off specialist phones costing from 3,500 euros to more than 100,000 euros.

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