Siemens to cooperate on mobile phones

Siemens AG has entered into discussions with other mobile phone manufacturers in hopes of merging their handset-production operations, the company said Wednesday.

In giving up its independent mobile phone manufacturing business, Siemens is following a similar strategy to Sweden's L.M. Ericsson Telephone Co., which announced earlier this year it would combine its handset operations with those of Japan's Sony Corp. The company believes that over the long term only Finland's Nokia Corp., the world's leading mobile phone maker, can survive in the handset business without partners, spokesman Alex Heim said Wednesday.

Heim declined to name any of the companies Siemens is considering as a partner.

Siemens slipped from fourth to fifth place in the global mobile phone market in the third quarter, according to figures released this week by research and consulting firm Dataquest Inc., a division of Gartner Inc. The German company sold 6.8 million units during the quarter, taking 7.2 percent of the world market. In the same quarter of 2000, Siemens sold 9 million handsets, an 8.7-percent market share. Nokia, by contrast, shipped 31.6 million units last quarter, or 33.4 percent of the world market.

Siemens lost some 22 million euros (US$19.4 million) before interest and taxes on its mobile phone business during the quarter, the company said in financial results released last week. But Heim said that the losses were largely due to a one-time write-off, without which mobile phone manufacturing would have earned some 50 million euros.

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Rick Perera

Computerworld

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