NEC will introduce no new smartphones, and will make current models only to order, as it struggles to find the economies of scale required to compete in the market.
The Japanese company is ending the development, manufacturing and sale of new smartphones, it said in a statement Wednesday. It will continue to manufacture existing models to order, and to maintain and support them, a spokesman said.
NEC will continue developing and producing conventional mobile phones, and will also operate its tablets business.
Separately, the company reported larger losses in the second quarter, while sales remained almost flat year on year. Net sales were up 1.4 percent to ¥640 billion (US$6.4 billion) while losses increased to ¥21.5 billion from close to ¥18 billion in the same quarter last year.
NEC is not a key player in the global mobile phone business, with sales mainly in Japan. The company's mobile business is operated by NEC Casio Mobile Communications, a company set up in 2010 when NEC merged its mobile phones business with those of Casio Computer and Hitachi.
NEC still holds over 70 percent of the equity of the joint venture, which had net sales of ¥140 billion and shipped 2.9 million phones in the fiscal year ended March 31.