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Siemens searching for a new partner to revive its failing cellphone division

Siemens AG, the world's fifth-biggest mobile-phone maker, is seeking a partner for its unprofitable cellular-phone division to revive earnings and win back market share, said management board member Volker Jung.

"A certain volume is required to reach a certain profitability," Jung told the Financial Times Deutschland.

"That's why we're having talks with several manufacturers about a cooperation."

Spokesman Eberhard Posner confirmed the remarks.

Siemens, which posted a fiscal fourth-quarter loss of 1.1 billion euros (US$970 million), is following in the footsteps of rivals Ericsson AB and Sony Corp.

Last month the firms entered a venture together to form Sony Ericsson Mobile Communications Ltd in a bid to jointly produce handsets.

Munich-based Siemens' market share in global handset sales dropped to 7.2 percent in the third quarter from 8.6 percent in the year-earlier quarter, according to the latest research compiled by Gartner's Dataquest.

Siemens is now No. 5 in terms of market share behind Nokia Oyj, Motorola Inc, Ericsson and Samsung Corp.

Jung didn't name a preferred partner, though he dis say that "a venture with a Japanese company usually lasts longer than one with a US company."

Posner said that it would be "wrong to assume that an announcement will be made within the next few days."

President of Toshiba Corp Tadashi Okamura, told Germany's Handelsblatt last month that a merger between the mobile phone units of the No.2 chipmaker and Siemens would be "possible."

Siemens also has held talks with Motorola about a handset venture, the Wall Street Journal Europe reported earlier this year, though the talks have since been suspended, the newspaper said.

Finland's Nokia is the world's biggest handset company with a market share of 33.4 percent in the most recent quarter.

Nokia is also the only company making money on mobile phones.

Siemens lost 21 million euros in the unit in the fiscal fourth quarter. The company is also reportedly having trouble breaking into the market for next generation mobile phones, which are based on the UMTS standard and allow users easier access to the Internet.
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