Nokia, the world's leading mobile phone maker, said on Thursday it would stop selling and marketing its mobile devices in Japan because its market share there remained below expectations.
"In the current global economic climate, we have concluded that the continuation of our investment in Japan-specific product variants is no longer sustainable," Timo Ihamuotila, executive vice president at Nokia, said in a statement.
However, sales of the Vertu luxury mobile phones, a brand owned by Nokia, will continue in Japan, the Finnish company said. Its global research and development as well as sourcing operations in Japan will also continue.
"In Japan we have had a low market share, below our own targets also. We have been investing in the market for a long time, but we are still in that situation," Thomas Joensson, communications executive vice president, said.
He added the company continued to believe its exclusive Vertu brand would succeed in the Japanese niche market segment despite the global financial turmoil.
Vertu makes expensive handsets that are often embellished with titanium, gold, jewels and crystal.
In October, Nokia said it estimated its global market share in July-September was 38%. The Finnish firm has done very well in emerging markets such as China and India, but has failed to attract technology savvy Japanese consumers.
Handsets designed by foreign manufacturers have traditionally been unpopular among Japan's notoriously finicky consumers.
The country's top mobile operator NTT DoCoMo and number three Softbank Mobile sell Nokia handsets, but the Finnish giant's market share is limited.
Many consumers are accustomed to Japanese-made mobile telephones, which are also widely used as electronic wallets, train tickets, and even to watch television.
Japan's mobile phone market has developed differently than those in other countries, with mobile operators, rather than handset makers, developing software and services.
The Yomiuri newspaper reported last week that Nokia planned to launch its own mobile phone service in Japan in February initially for Vertu handsets.
Kyodo News said Nokia was considering starting a mobile phone service as a virtual network operator, using communication lines owned by NTT Docomo.
Nokia will boost its sales network in Japan and present its own price plans for the mobile telephone services, the report said.© Wire reports