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Fri, Jan 07, 2005 - Page 12 News List

Siemens mulls options for beleaguered cellphone unit

SOLUTION The company will decide whether to `fix, close or sell' its money-losing mobile phone business by the end of the month, the firm's chief executive said

BLOOMBERG

Siemens AG, the world's fourth-largest maker of mobile phones, will deliver a proposal on the fate of its unprofitable mobile-phone business by the end of the month, Siemens Chief Executive Heinrich von Pierer said.

"We will develop a concept by Jan. 27," the date of the annual shareholders' meeting, von Pierer said at a press briefing in Beijing.

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

One option Siemens has is pushing ahead with its mobile-phone unit by increasing the number of phones it produces in China -- to 18 million to 20 million a year from 14 million currently -- von Pierer said at a briefing in Bangkok on Nov. 18.

Von Pierer declined to comment on reports that Siemens may sell the handset business to partner Ningbo Bird Co Ltd (寧波波島), China's biggest maker of mobile phones. Siemens signed an agreement in June to sell its phones through Ningbo Bird's 30,000 retail outlets.

"I don't comment on market rumors," von Pierer said. Siemens' management and supervisory boards will decide the fate of the handset business sometime later this year, he said.

Munich-based Siemens, which said in May it will invest 1 billion euros (US$1.32 billion) in China in the next few years, competes with Motorola Inc and Nokia Oyj as well as Chinese manufacturers such as TCL Corp in selling handsets. Siemens also counts on contracts for phone network equipment, power generators and high-speed trains to help reach its goal to more than double sales in China in three to five years.

Siemens' China sales rose 28 percent in fiscal 2004 to 38.4 billion yuan (US$4.6 billion), von Pierer said. New orders climbed 34 percent to 41.8 billion yuan.

"Overall, we gained market share in China and proved that we can win against both the global and local competition," von Pierer said.

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