Yahoo Finance is reporting that Panasonic Corp will pull out of the smartphone market in Japan and pare its smartphone operations to outsourced production in emerging markets like India, the company's president said on Wednesday.

Panasonic President Kazuhiro Tsuga, has warned he would weed out any division that fails to meet a 5 percent operating margin goal within three years.

Tsuga told Reuters in an interview that the company's mobile division was likely to lose more than the 1.1 billion yen ($11.02 million) targeted loss for the financial year ending next March.

"It's not acceptable for the company to be bleeding red ink like this, so we have to think about ways to develop assets that we do have in a more effective direction," Tsuga said.