Siemens may stop making mobiles

Siemens could stop producing mobile phones if a business unit swap with Motorola goes ahead.

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By  Philip Fenton Published  October 2, 2002

Siemens may stop manufacturing mobile phones if a business unit swap with Motorola gets the go-ahead.

Under terms being discussed, Motorola, the world’s second largest handset manufacturer, would receive Siemens’ handset business, the world’s fourth largest. In return Siemens would receive Motorola’s wireless networking equipment business and an as yet undecided sum.

The transaction would boost Motorola's share of the mobile handset market from 15.7% to 24.1%, based on mid-year estimates by Gartner Dataquest. It would also rid the US group of its network business, which suffered a US$1.4bn loss in 2001 on sales of $6.5bn.

The deal would give Motorola’s flagging European presence a significant boost: in June it had just 9.9% of the market.

The deal would still leave Motorola far behind market leader Nokia, but it would give it a significant advantage over Samsung, which earlier this year overtook Siemens to claim third place.

Both Siemens and Motorola declined to comment.

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