Fresh Speculation Over Siemens' Handset Business
By Carlo Longino, Tue Jan 18 00:00:00 GMT 2005

As the company's self-imposed "fix it, close it or sell it" deadline of January 27th approaches, a published report says Siemens is ready to shut down its handset business if it can't find a buyer.

The company's chairman said a while back that Siemens would announce a decision on the future of its handset unit at its annual meeting at the end of January, a part of the restructuring of the entire conglomerate focused on bringing it back to profitability. There's been plenty of speculation over what will happen, with its partner in China, Ningbo Bird, coming up as a possible suitor, though it rejected the idea. Now, the latest rumbling says Siemens will shut down the unit unless it can find a last-minute buyer.

Siemens' exit would throw nearly 8 points of market share up for grabs, and wouldn't offer much of a return to shareholders. Some analysts are maintaining that because of this, and some similar moves in the company's past, a joint venture remains the most likely option. Siemens linked up its PC business with Fujitsu to turn it around, and also has a partnership with Bosch in home appliances. The analysts are pointing to Ningbo Bird and to NEC -- though NEC, with which Siemens has a 3G network gear partnership, is also saying it's not interested.

Ningbo Bird still seems to be the most likely buyer, should one emerge. It needs to make a big move if it wants to realize its international goals, and China is an important -- and growing -- market for Siemens, which announced a it would open a 3G R&D center in Hangzhou later this year, and has partnered with two Chinese vendors to make TD-SCDMA network equipment. The company's denials would indicate otherwise, but as the deadline nears, a deal wouldn't be too surprising.