Siemens delays decision on handset biz fate

Plegdes to provide 'road map' for loss-making... sometime

Siemens yesterday reported that there was nothing to report, stating that no decision had yet been made concerning the future of the engineering giant's loss-making mobile phone business.

The phone wing lost €143m ($186.4m) during its most recently completed quarter, Q1 FY2005. Quarterly sales fell year on year from €1.49bn ($1.94bn) to €1.17bn ($1.53), down 21.5 per cent.

Unit shipments fell from 15.2m units in Q1 FY2004 to 13.5m in the three months to 31 December 2004. That puts the company behind LG, which shipped 13.9m handsets in the same period. LG recently denied being in talks to acquire Siemens' handset business or to merge the two companies' operations.

Siemens' average handset selling price fell year on year to €86 ($112.1) from €98 ($127.8).

Addressing the division's decline, Siemens pledged to put in place a "road map" to drive the handset business, but did not say when its plans would be announced or implemented.

However, new Siemens chief Klaus Kleinfeld takes over from his former boss Heinrich von Pierer next week. The troubled Mobile Devices division is likely to be high on his list of priorities.

Overall, Siemens' Communications group, of which Mobile Devices is a part, saw profits rise 37.9 per cent year on year to €240m ($312.9m) despite a seven per cent decline in sales, to €4.24bn ($5.53bn). Mobile devices' drop in sales accounted for 97.5 per cent of the division's revenue fall.

Rumours that Siemens had decided to sell its handset business surfaced late last year. However, a variety of suggested partners and purchasers have they are denied interest in buying the company. ®

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