Toshiba today announced that it will reshape its mobile phone production system in order to promote effective utilization of overseas outsourcing. Implementation of this measure will see Hino Operations, Toshiba's mobile phone production facility for the Japanese market, outsource manufacturing to overseas EMS manufacturers from October 2009. Hino Operations will be positioned as the headquarters for global production, and will focus on product control, support of introductions of new products to EMS manufacturers, and repair and service activities. Product development and design will continue at Hino Operations.

Japan's mobile phone market went into steep decline following the introduction of a new sales system that raised handset prices and encouraged a long-term replacement cycle, a decline reinforced by the contraction in consumer spending resulting from the current recession. In responding to these new market conditions, Toshiba has undertaken a comprehensive review of mobile phone production as an important item under the Action Programs to Improve Profitability, announced by the company on January 29, 2009.

Hino's production of mobiles phones for the Japanese market will be outsourced to EMS manufacturers overseas. Smartphone production for all markets will continue to be conducted at Toshiba Information Equipment (Hangzhou) Co., Ltd.

The approximately 200 employees now engaged in mobile phone production at Hino will be reassigned within Toshiba Group.