BEIJING—China has imposed a one-year sales ban on Panasonic-brand phones made by Japan’s Matsushita Communication Industrial, because the phone’s software referred to Taiwan as an independent country.
The government in Beijing considers Taiwan to be part of the People’s Republic of China and does not recognize the rival government in Taipei, which uses the name ‘Republic of China’ (ROC) that appeared on the handset’s display.
Matsushita started recalling its GD50, GD90, GD92 and GD93 Panasonic handsets to adapt the offending software and apologized to the Chinese government, but these actions were not sufficient to prevent a ban.
Matsushita will continue to manufacture cell phones in China for export. The impact of the ban on its profits would not be too heavy as sales of Panasonic handsets in China are limited to approximately 3.9 percent of the domestic market, but the company might further lose market share to its competitors as a result of the one-year ban.
