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Mitsubishi Shuts Wireless Group, But May Return

Mitsubishi Wireless Communications will cease operations on March 31, 2002, but the company said Mitsubishi-brand phones might return to the United States at a later date.

The Mitsubishi brand is one of a handful of brands — including Audiovox, Motorola and Nokia — that have appeared continuously on wireless phones in the United States since the first cellular systems went online in late 1983 and 1984. In recent years, the brand’s market share has fallen to negligible levels.

Mitsubishi Wireless is 87-percent-owned by Mitsubishi Electric and 13-percent-owned by Mitsubishi Corp., a separate company. Mitsubishi Electric pulled the plug after it revised down its sales and profit forecasts for the fiscal year ending March 2002 because of weakness in sales of wireless phones, semiconductors, and information technology equipment. Mitsubishi Electric reduced its sales expectations for the fiscal year to $33.3 billion from $36.7 billion, and its net profit forecast plummeted to about $17 million from $641 million.

On April 1, 2002, Mitsubishi Electric and Electronics USA of Cypress, Calif., will take over customer support and after-sale service in the United States.

Mitsubishi Electric intends to return to the U.S. handset market sometime after the March 31 closure, but the company hasn’t yet determined how or when, a Mitsubishi Wireless source said. “How we come back remains to be seen,” the marketer said. “We could reestablish a U.S. entity, outsource U.S. distribution, do private label [to carriers], or OEM, like we did previously with our T200 to Audiovox.”

In the meantime, Mitsubishi Electric’s Japanese and European business units will develop handsets for the North American market, the marketer said.

Although Mitsubishi’s wireless share has been shrinking for years, Mitsubishi Electric decided to pull the plug after Mitsubishi Wireless lost its contract with VoiceStream and failed to meet a deadline for supplying the T300 CDPD-equipped tri-mode TDMA phone to AT&T Wireless, said another Mitsubishi source. AT&T threw the lost business to Panasonic.

Those two carriers were Mitsubishi’s largest accounts, although it also had contracts with multiple smaller TDMA and GSM carriers.

Mitsubishi Wireless employs 155 people and reported revenues of $246M in fiscal 2000. Before they formed their joint venture in 1995, Mitsubishi Electric and Mitsubishi Corp. marketed phones separately. Mitsubishi Electric used the DiamondTel brand.