Panasonic Aims To Narrow Corporate Focus With Possible Asset Sale To Nokia
According to Nikkei, Panasonic is interested in offloading its cellular base station business. Nokia is one of many prospective buyers that Panasonic is believed to have approached.
This is the latest development in what could be Panasonic's strategy to eliminate less profitable businesses and focus on a smaller number of core markets.
The company is famous for producing large TV screens, particularly PDPs (plasma display panels). Panasonic began to back away from this aging technology earlier this year.
Despite the initiative, Panasonic has continued to tumble.
After the firm was de-listed from the New York Stock Exchange, Panasonic announced that TV sales -- its bread and butter -- had fallen 20 percent.
In March, Panasonic was rumored to be interested in selling its handset business to HTC or Taiwan Semiconductor Manufacturing Company (NYSE: TSM). Neither firm seemed to bite, however. Panasonic may now be forced to close that business without any monetary gain.
While Panasonic's future is still a question mark, one thing has become clear: the company is eager to become a leaner corporation.
If there is one area where Panasonic could grow, it is battery production. The company partnered with Tesla (NASDAQ: TSLA) to build battery cells for 80,000 vehicles. The four-year deal is set to expire in a couple years.
Panasonic will likely fight for a contract renewal, but it could face new competition from Samsung (OTC: SSNLF). The South Korean tech giant is rumored to be working on a deal to supply additional batteries to Tesla.
Apple (NASDAQ: AAPL) knows better than anyone that Samsung is very good at becoming the dominant supplier of significant items. If it manages to secure a deal with Tesla, it could slowly push Panasonic out of the picture.
Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.
Louis Bedigian is the Senior Tech Analyst and Features Writer of Benzinga. You can reach him at 248-636-1322 or louis(at)benzingapro(dot)com. Follow him @LouisBedigianBZ
© 2015 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.