Matsushita Electric to Revamp Global Mobile Phone Operations, Phase Out 2.5G GSM to Focus on Next-generation Technologies.

Tokyo, Japan, Dec 9, 2005 - (JCN) - Matsushita Electric Industrial (TSE: 6752; NYSE: MC) announced that subsidiary Panasonic Mobile will phase out overseas 2.5G GSM mobile terminal operations due to severe global competition.

Panasonic Mobile will accelerate the development of a global platform based on the Linux OS that is now being used in mobile terminals for the Japanese market. The Linux OS-based platform will be integrated into Matsushita's new system LSI, hoping to establish global platforms through integrating core technologies for wireless modem and AV processing.

Panasonic Mobile will also close R&D operations at Panasonic Mobile Communications Development Corporation of U.S.A. (PMCDU) in the United States, which has been developing other OS platforms.

Going forward R&D operations at Panasonic Mobile Communications Development of Europe Ltd. (PMCDE) in the United Kingdom will concentrate on the development of 3G and next-generation technologies such as wireless modems and platforms.

Panasonic Mobile will reorganize its overseas manufacturing facilities. Panasonic Mobile Communications Corporation of the Philippines (PMCP), where mainly GSM terminals have been produced will be closed.

TGSM manufacturing in the production lines at Panasonic Mobile & Automotive Systems Czech (PMACZ) will also be discontinued.

GSM manufacturing at Panasonic Putian Mobile Communications Beijing Co., Ltd. (PMCB) will shift to 3G mobile terminal production.

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