Nokia, the world’s largest maker of mobile phones, said on Thursday that it would cease development of cell phones for the Japanese market, the second largest market in the world, due to current economic situation. The exception will be made for Vertu-branded luxury phones.

“In the current global economic climate, we have concluded that the continuation of our investment in Japan-specific localized products is no longer sustainable,” Nokia executive vice president Timo Ihamuotila said in a statement.

Japanese cell phones are substantially different compared to mobile handsets used in other parts of the world. Even though Nokia owns about 40% of the global cell phone market, the company decided not to compete for Japan, where it commanded roughly 1% of shipments.

“There is definitely a market in Japan for Vertu. Nokia has done the right thing in pulling its other models from the Japanese market, given its weak share,” said Carolina Milanesi, an analyst with Gartner Research, reports Forbes.

The Yomiuri newspaper reported last week that Nokia planned to launch its own mobile phone service in Japan in February initially for Vertu handsets. Kyodo News said Nokia was considering starting a mobile phone service as a virtual network operator, using communication lines owned by NTT Docomo, reports AFP.

Tags: Nokia