Feeds

Siemens to spin off loss-making phone unit

Handset divison drags down group earnings - again

  • alert
  • submit to reddit

Protecting users from Firesheep and other Sidejacking attacks with SSL

Siemens' troubled mobile phone business once again pulled down the group's quarterly income, making it "difficult to assess" the group's anticipated FY2005 income gain, CEO Klaus Kleinfeld admitted yesterday.

The upshot: the handset unit will be formed into a separate operation, the better to sell or float it off.

Reporting group financial performance for the three months to 31 March 2005, Siemens' second quarter, the company said its net income fell to €781m ($1bn) from €1.21bn ($1.6bn) a year ago, a fall of 35.5 per cent.

Sales, by contrast, rose 4.3 per cent year on year to €18.6bn ($24.1bn).

The mobile phone division lost €138m ($178.5m) during the quarter on the back of a 30 per cent year-on-year fall in sales, to €842m ($1.1bn). Siemens' communications products group, of which the handset unit is a part, lost €19m ($24.6m) as a whole.

Kleinfeld said he will restructure the handset unit as a separate business, declaring he is "positive" he will find partners - buyers, in other words - for the unit. If he finds one, Siemens is "unlikely" to retain a majority share in the operation, Siemens' CFO, Heinz-Joachim Neubuerger, said. The restructure will take place in one to three months' time, Neubuerger added.

Mobile phone sales are slowing around the world, a trend that's hitting Siemens particularly hard. Between Q1 2005 and Q1 2004, the company lost 2.8 percentage points of market share, to 5.4 per cent, according to Strategy Analytics numbers released yesterday. All other major vendors raised their market shares year on year.

Siemens' phone unit has been the subject of sale speculation since late last year, though rumoured acquisition/merger partners, from China's Ningbo Bird to South Korea's LG, have subsequently stated they have no interest in the loss-making German business.

Earlier this year, Kleinfeld, who took over the CEO's post in January, said he was considering either a sale or a spin-off of the mobile phone unit. Then, in March, the group said its strategy was to cut costs at the unit to bring it back to profitability. ®

Related stories

World mobile phone sales slow
Smart phones boom - Symbian up, MS and Palm down
Smart phones make inroads in business
Siemens to cut phone biz costs by 1bn
Siemens outsources IT - to itself
Siemens readies digital TV, VoIP Wi-Fi handsets
Siemens delays decision on handset biz fate
LG rejects interest in Siemens mobile biz

Choosing a cloud hosting partner with confidence

More from The Register

next story
JINGS! Microsoft Bing called Scots indyref RIGHT!
Redmond sporran metrics get one in the ten ring
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Murdoch to Europe: Inflict MORE PAIN on Google, please
'Platform for piracy' must be punished, or it'll kill us in FIVE YEARS
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Found inside ISIS terror chap's laptop: CELINE DION tunes
REPORT: Stash of terrorist material found in Syria Dell box
OECD lashes out at tax avoiding globocorps' location-flipping antics
You hear that, Amazon, Google, Microsoft et al?
Show us your Five-Eyes SECRETS says Privacy International
Refusal to disclose GCHQ canteen menus and prices triggers Euro Human Rights Court action
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Security and trust: The backbone of doing business over the internet
Explores the current state of website security and the contributions Symantec is making to help organizations protect critical data and build trust with customers.