Siemens Mobile no more?

18 Jan, 2005 | Post your comment


According to a shocking news release in Sunday Telegraph, Siemens is set to shut down its mobile phone division with the loss of more than 5,000 jobs unless it can find a partner for cooperation.

A spokesman for Siemens declined a comment but confirmed to the Scotsman newspaper that the division's future was under review by chief executive Heinrich von Pierer and that an announcement will be made at the annual meeting.

Von Pierer told Bloomberg: "Either the situation has to be fixed or we have to find a partner for cooperation. We have to fix, close or sell.".

The group will announce its final decision at its annual meeting on January 27.

Any move to shut down Siemens Mobile will destabilize the global handset industry as Siemens is the fourth-largest mobile phone manufacturer in the world, with a 7.6 per cent market share, and 13m handsets being sold in the third quarter of 2004.

In its struggle to make profits, the giant German industrial conglomerate has generated a loss of 140 million Euro in the fourth quarter of 2004. Analysts believe that Siemens has failed in its attempt to stabilise the mobile devision and will be forced to abandon it. A possible resolution for Siemens is to find a joint venture partner prepared to pour billions of euros into the company in exchange for a majority equity stake.

Possible buyers for Siemens Mobile include NEC, the Japanese group, and Ningbo Bird, a Chinese conglomerate.

Update 21 Jan:
Siemens AG has no plans to sell its loss-making mobile handset production operations outright, Ralf Heckmann, head of the company's works council told Die Welt. "Discussions are ongoing," Heckmann told the newspaper. "We are not talking about a sale of the unit, but discussing overall problems within the Communications unit."