Matsushita Electric to Reorganize Overseas Mobile Phone Operations

Matsushita Electric Industrial Co., Ltd. (MEI (NYSE: MC)), today announced that one of its subsidiaries, Panasonic Mobile Communications Co., Ltd. (Panasonic Mobile), will phase out overseas 2.5G GSM mobile terminal operations due to severe global competition. By concentrating resources into next-generation mobile terminal technologies, as well as unifying platforms and core technologies for the Japanese and overseas markets, Panasonic Mobile aims to improve development efficiency and product competitiveness. Sales and service activities for the current GSM products will continue.

In line with this decision, the following initiatives will commence from January 2006:

(1) In order to concentrate resources into the development of common core technologies and next-generation mobile terminals, Panasonic Mobile's global R&D structure will be reorganized.

Panasonic Mobile will accelerate the development of a global platform based on the Linux * Operating System (OS) that is now being used in mobile terminals for the Japanese market. Furthermore, the Linux OS-based platform will be integrated into Matsushita's newly developed system LSI, resulting in the establishment of global platforms through integrating core technologies for wireless modem and AV processing. In this way, Panasonic Mobile will further strengthen technological foundations for next-generation mobile terminal development on a global basis, as well as reinforce its mobile terminal business in Japan.

By focusing on the development of a Linux OS-based global platform, Panasonic Mobile will 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. In addition, 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.

(2) With the phasing out of GSM mobile terminal operations, 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. The GSM manufacturing in the production lines at Panasonic Mobile & Automotive Systems Czech, s. r. o. (PMACZ) in the Czech Republic will be discontinued. GSM manufacturing at Panasonic Putian Mobile Communications Beijing Co., Ltd. (PMCB) in China will shift to 3G mobile terminal production.

* Linux is a registered trademark of Linus Torvalds.

Profile of Each Facility

R & D Facilities
Panasonic Mobile Communications Development of Europe Ltd. (PMCDE)
Location: Berkshire, United Kingdom
Established: March 27, 2001
Employees: 228
Activities: GSM Software Development, UMTS Software Development
including Modem, Global Regulation & Approval function,
System Engineering for EU region


Panasonic Mobile Communications Development Corporation of U.S.A.
(PMCDU)
Location: Georgia, U.S.A.
Established: April 1, 1998
Employees: 228
Activities: UMTS terminal development using Symbian/S60 Platform

Manufacturing Facilities
Panasonic Mobile Communications Corporation of the Philippines (PMCP)
Location: Laguna, Republic of the Philippines
Established: December 4, 1987
Employees: 842
Activities: Manufacture of GSM mobile terminals, in-vehicle ETC
terminals *, video surveillance CRT monitors
* In-vehicle ETC terminals are consignment products
from Panasonic Automotive Systems Co., Matsushita
Electric and video surveillance CRT monitors are
products of Panasonic System Solutions Co., Matsushita
Electric.

Panasonic Mobile & Automotive Systems Czech, s. r. o. (PMACZ)
Location: Pardubice-Stare Civice, Czech Republic
Established: March 2001
Employees: 210 (Manufacturing division of mobile terminals)
Activities: Manufacture of GSM mobile terminals and car audio
equipment *
* Production of car audio at PMACZ will continue. Car
audio equipment are products of Panasonic Automotive
Systems Co., Matsushita Electric.

About Matsushita Electric Industrial Co., Ltd. (Panasonic)

Matsushita Electric Industrial Co., Ltd., best known for its Panasonic brand name, is a worldwide leader in the development and manufacture of electronic products for a wide range of consumer, business, and industrial needs. Based in Osaka, Japan, the Company recorded consolidated sales of US$81.44 billion for the fiscal year ended March 31, 2005. Matsushita's shares are listed on the Tokyo, Osaka, Nagoya, New York (NYSE:MC), Euronext Amsterdam and Frankfurt stock exchanges. For more information on the company and its Panasonic brand, visit the Matsushita website at http://panasonic.co.jp/global/index.html.

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