Siemens continues search for cell phone partner

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May 4, 20052 mins

Company still considering selling unit

Siemens said Wednesday that it is still in talks with companies about forming a partnership for its mobile phone manufacturing unit or selling it, after a German business newspaper reported that Motorola had backed out of a deal at the last second.

Siemens declined to comment on a report in the Frankfurter Allgemeine Zeitung, saying that Motorola had pulled out of the talks and that no other company was lining up to take over the business.

Wolfram Trost, a spokesman for the company, said the Munich-based electronics giant continues to negotiate with several companies and that it hopes to reach a decision soon. “As we have said before, we have three options to deal with the handset unit: cooperate with a partner, sell the unit outright or close it,” Trost said. “Closing is the worst option because of the jobs and know-how that would be lost. Cooperation is our preferred option.”

Last year, rumors surfaced that Siemens was close to reaching a partnership agreement with China’s Ningbo Bird Co. Ltd. The company has a distribution agreement with Siemens in China.

Siemens’ mobile phone unit continues to bleed money, having posted a loss of €143 million (US$195 million as of Dec. 31, 2004, the last day of the period being reported) in the first quarter, which ended Dec. 31, compared to a profit of €64 million the year before.

The first-quarter loss followed a loss in the fourth quarter of €141 million. Siemens attributed that loss to competition from lower priced handsets and quality problems that delayed the rollout of the company’s new 65 series of mobile phones.