Siemens group saddled with handset problem

7 Jan 2005

The German electronics group Siemens is still undecided on the fate of its troubled mobile handset business. According to a Financial Times report, the company’s chief executive, Heinrich von Pierer, says that a decision on whether the group will “fix, close or sell” the handset division will be made by the end of the month. Although Siemens Mobile is the world’s fourth largest mobile phone manufacturer, shipping more than 12.5 million units in the third quarter of last year to give it an 8% share of the global handset market, it is losing ground on its rivals and is failing to make a profit. Siemens specialises in low-end phones but has been losing out to the Finnish company Nokia which has been cutting handset prices to consolidate its position as the number one manufacturer. Asian firms such as LG and NEC are also reportedly making headway in the low-end market at Siemens’ expense.