Nokia to end phone sales in Japan

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.

Nokia executive vice president Timo Ihamuotila said in a statement that his outfit will continue producing its luxury Vertu brand, for now. But the current global economic climate, means that chucking money around investing in Japan-specific localised products is no longer a good idea.

"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.

Japan rejected Apple's Iphone 3G for not having enough gimmicks so you know a more serious technology company like Nokia is going to have trouble.

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.

"Nokia has bigger opportunities in other markets," said Carolina Milanesi, an analyst with Gartner Research, "not in a shrinking market like Japan."

The company will also continue selling its ultra-high-end range of "Vertu" phones in Japan: these luxury handcrafted phones are tailor-made for recession-proof buyers, at around $5,000-$10,000 a pop.

Also on Thursday, Nokia said it had begun shipping its answer to the Apple iPhone: its touch-screen 5800 model. Although most of Europe and the United States will have to wait till 2009 before they get their hands on it, markets including Russia, India, Hong Kong and Spain will have the phone before the year is out.