Panasonic today announced its plans to pull out of Japanese smartphone market and not to indulge further in the smartphone making business. However, the company will continue its smartphone operations in India by selling rebranded mobiles in the emerging market said Kazuhiro Tsuga, President Panasonic.

The decision taken by the Japanese electronics company is not at all surprising looking at the mounting losses it has suffered in the last two financial years. In an interview with Reuters, Tsuga revealed that the company’s smartphone division may incur losses in tune of over 1.1 billion yen ($11.02 million) in the present financial year and the company can’t afford to have a division which continues to make losses every year.

Tsuga has already warned that if any division fails to meet operating margin goal of 5 percent within three years then he would not hesitate to weed out the division. “It’s not acceptable for the company to be bleeding red ink like this, so we have to think about ways to develop assets that we do have in a more effective direction,” said Tsuga.

Panasonic will not completely stop its handset manufacturing division as it is planning to expand its “Toughbook” notebook series and will develop smartphones for its enterprise users.

The global mobile market is going through a volatile phase and companies like Panasonic have been immensely affected by the rise of the two leading smartphone manufacturers including Apple and Samsung.

Nokia’s smartphone market share has also slipped drastically in recent years, which has led to the announcement of Nokia’s acquisition by Microsoft this week.