Bang & Olufsen drops handsets

Bang & Olufsen, the Danish maker of high-end audio and video products, is getting out of mobile phones to focus on its core competencies, the company said last week.
B & O originally had partnered with Samsung Electronics Co. Ltd. to create a striking flip phone that had sold for $1,275 in B & O stores. The two companies announced the Serenata, a high-end music phone (retail: $1,400 to $1,700), the day after B & O declared itself out of the handset business.
“We need to get back on the track that produced iconic products” in audio and video markets, said CEO Karl Kristian Hvidt Nielsen, in a prepared statement.
B & O also announced that it would eliminate about 300 jobs in a cost-cutting move intended to bring the company back to profitability after two quarters of losses. The company has about 2,580 employees, according to CorporateInformation.
B & O made its decision a day after Motorola Inc. announced that it had taken the plunge into the luxury phone market with a $2,000 handset dubbed the Aura.
Luxury phones – often the result of high-end, non-telecom brands such as B & O teaming up with handset vendors – are a lucrative market, for some. Global revenue from the luxury segment is forecasted to reach $11 billion next year, according to ABI Research. That number is expected to quadruple within five years, the research firm said. (ABI’s forecast was issued prior to the financial-sector meltdown in September.)