Japan’s NEC Cutting 10,000 Jobs – Is Apple’s iPhone to Blame?

NEC Medias PP, for Docomo

Some startling news coming from electronics maker NEC in Japan, who reportedly said yesterday that it will be cutting 10,000 jobs from its workforce, with most of those coming from its mobile unit. A report from Reuters cites competition from foreign players in the smartphone space, including Apple’s iPhone, negatively impacting NEC’s business in Japan.

The report went on to say that NEC has cut its annual projected sales by almost a quarter to five million phones, and that the company would post a net loss of 100 billion yen (or $1.3 billion) for the year to March 31.

I find the direct references to Apple (NASDAQ:AAPL) here interesting [1], because most companies will usually put on a brave face and avoid acknowledgement of the iPhone threat. Docomo (NYSE:DCM), who carries NEC’s Medias smartphone as one of its top Android offerings, has asserted that its Android lineup includes many worthy competitors that can “fully compete” with Apple’s iPhone, which currently operates on competing networks from Softbank and KDDI’s au.

NEC’s woes are yet another indication that Japanese companies can no longer be content to operate only in their own backyard. Manufacturers like Sony and Fujitsu seem to realize that they have to expand beyond Japan’s borders, and build their smartphone businesses in other markets if they are to remain successful in the long term.