Siemens mobile phone division to close down

I have heard rumours that Siemens intends to sell off its mobile handsets division, or shut it down. Siemens is actually number 5 in worldwide handset sales. Nokia is of course number 1.

Anybody know anymore about this?

Mmmmmm

Siemens has treated its mobile phone section badly I have heard. On/Off with the support. They could have possibly survived but now it seems that the fate is sealed.

Probably to be sold, "re-structuring" before or after.

Maybe some kind of tie in deal with an Aisan manufacturer or venture capitalist ?

Basicly a result of Siemens policy of dumping everything that wasn't super-profitable rather than anything wrong with that part of Siemens itself per se.

There are a number of TTers who work for Siemens Mobile. Time for them to spill the company's secrets!

having gone through sort of shit myself with the company i'm at here, just a note to all siemens tt people. your management is shite not you. although i agree with grtho, siemens is a bit stuck with what to do at the moment, and after the deutsche bank debacle last week i bet the managment is trying to work out how to do something positive.

madaxe info is a bit outdated.

Lamprecht, a guy from the executive board of Siemens said yesterday that they will restructure the business before thinking about selling it. Closing down has been ruled out most of the times as it would destroy a lot of value (and might be a big hit to Siemens' image).

So we are looking at some restructuring and making the hole thing profitable again. This doesnt mean the jobs are all too safe though.

Yes, I work there.

@CodeRed. Thanks for the info. I met a high executive at a conference who was quite interested in my product, and now that I have it running sweetly on an SX1 I wanted to contact him. However it would have been a bit pointless if the division was being closed down/sold.

My info comes from lots of reports in January, so its not old, even if its outdated!

Yeah, I actually wanted to add that is mere speculation anyways. Being an employee there you realize for the first time how much bullshit you read in the press.

Yep the first time we realised that the Siemens group had sold us (NOT mobile phones) was after the fact. Didn't even know they were thinking about it. Glad they did though...

I'm not surprised. The mobile phone division has been looking for a JV partner since 2001. Siemens was not able to find a partner as the price they were asking for is too high.

Being a big industrial conglomerate Siemens does not know how to compete in the fast moving consumer electronics business. Especially now when the mobile phone is quickly becoming a multi media entertaintment device - Siemens is even less able to cope.

Siemens is pretty good in engineering working on long term infrastructure project but when it comes to figuring out what young people want in the fast moving and fashion driven mobile phone sector - Siemens has the slightest clue.

It is now losing a million Euro a day and has farmed out distribution to Bird in China, withdrawn from the fast moving Indian market and retrenching in practically every part of the world.

It is quite sad really to see such a big company brought to its knees. Almost reminds me of the pain that Alcatel and Philips went thru' when they had to scale down the mobile phone business.

@ canuck... to borrow another member's name...fap fap fap fap fap fap! I am soo sick of talking and hearing about it, without seeng anything really being done.

Yes, it is shitty that the press is having a ball over this.
And yes, our management should have sorted out the whole debacle about 4 years ago. I've been here a year but many friends and colleagues have been in this situation on and off since I can remember.

And yes, I expect them to cut our pay, try to vamp up their competitiveness and drop a few jobs where reasonable. That should help the value for a partnership or sale.

They apparently intend to give us details of the "sanitization" in the next couple of weeks (they hinted at the end of January that there will be big financial measures). But whether it all helps in the end, and whether people decide to stay here at all, is a personal view and pure gossip.

see? round and round in circles, you can chat all you like but no-one knows the answer.

As for Jens Wurst's
... er, we are 400,000 staff in 26 countries and the company made a huuuuge profit in the first quarter, I wouldn't be quite that depressive! I have no fear for my job at all.

JD - I can understand your concern.

Well Siemens Mobile Phone is basically a black sheep in the Siemens stable of company. On the one hand its brand adorn the Real Madrid jersey and spearhead the brand image of Siemens as a conglomerate, on the other hand its mobile phones are uninspiring and is like a generation behind the market leaders in design, features and slickness. It might have a strong brand awareness in German speaking countries but in the fast growing emerging markets like China, India or Russia - it is really a laggard. This a reflection of the lack of competence that Siemens as a group has in the fast moving consumer business - especially when it is very short cycled and both technology and fashion driven at the same time.

Unfortunately the emerging markets are where the growth is - as mobile phone penetration are still low <20% out of like 3 billion people. Motorola is coming out with phones that will retail for <US$40 for these emerging markets.

While in Western Europe, where 3G is starting to gain traction - big operators are buying 3G handsets from vendors like Sharp, Sanyo, Motorola, Nokia, LG,etc. Siemens is also ill prepared for this growing 3G business as it did not invest in 3G technology. Its 3G handset is made under OEM by Motorola - most operators are aware of it once they see the innards of the Siemens' 3G phones, with 3G network it is dependent on NEC for technology - Siemens is nothing but a glorified sub-contractor. Siemens has basically no credibility with operators when it come to 3G.

If you are wondering why it is so hard for Siemens corporate to find a buyer or JV partner for its mobile division - it is very simple - the mobile phone division is a hollow division devoid of any sort of advance technological competence. At the same time the Siemens name is also a industrial brand name which does not carry well in the consumer electronics business. Just look at its new tagline "Design for Life" - it just show a lack of understanding of the dynamics of the business. In emerging markets - young people treat mobile phone as a fashion accessory that means they change their mobile every year like their clothings - nobody buy a phone that is designed for life - it is so yesterday! At the same time - the operators are also trying to get consumers to trade up to higher feature multi-media phones - which will drive ARPU. The tagline "Design for Life" is so industrial and so unprofitable in its outlook. It is out of tune with the fashion driven and short life cycled mobile phone business.

If the mobile phone division continues another 2 quarters at a loss - without being able to find a buyer or JV partner - I think Klaus Klenfeld will be forced to close the mobile phone division and outsourced all mobile phone manufacturing to 3rd parties just like what Alacatel and Philips are doing. God bless us all then.

look wurst,

we dont need you to explain Siemens deficiencies. We know them. We can read about that in the paper. You dont need to comment on that.

Besides, hombre, to call Siemens mobile phones uninspiring is just plain ignorance. Siemens invented the Slider phone, as well as the new Swivel SK65 design. It was the first handset manufacturer with a MP3 player. (this doesnt take Japan into consideration I dont know about that market)

Apart from that Siemens is strong in a few developing countries such as Brazil and indeed Russia.

Too bad you are also one of the people that does not understand the slogan "designed for life".

I could tell how Siemens could indeed be successful, but it's just not worth it, Mr. Ireaditallinthepaper.

Interesting discussion!
I'm not a Siemens employee, but I'm working in the mobile phone business, and I've been working a lot with Siemens developers. After all what I've heard from those guys, I believe Siemens Mobile could very well operate profitable - if the management would be willing to make decisions and take certain risks. I've been talking to one of the major designers for the SX-1 (from Aalborg, where most of the SX-1 has been done) and he said that Siemens' top managers in Munich just don't dare to make a decision if there is any risk for their career going along with it. As that guy said: "it just doesn't work to go to Munich and discuss with the management what we want to do - usually we first do the work and then present them a ready made design; and then they may say, well, that looks great, let's ship this to the market!"

I know more than half of the mobile phones Siemens starts to develop never come to market but go to trash bin; and I know right now there are some 40 designers and programmers in Aalborg who have nothing to do because their last project just went to the garbage yet another time. I know there's a lot of brilliant heads working at Siemens Mobile, and probably the loss in money caused by projects that are cancelled has lower impact on the profit of the company than the loss in motivation for those bright guys who see some six months of their hard work ending up in the trash bin.

I wanted to apologize about my rant, I got a bit emotional yesterday. Sorry.

OK, here's the latest for all of you who care ...

February 20, 2005

Siemens ‘incentive’ fails to stir any interest
Paul Durman

SIEMENS, the German manufacturing giant, has offered an incentive of up to €500m (£345m) to tempt buyers for its troubled mobile handset division.

According to a senior executive familiar with the big handset makers, the cash “dowry� has failed to attract an offer from NEC and Fujitsu of Japan, or from Ningbo Bird of China.

Siemens has committed itself to “close, fix or sell� Siemens Mobile, sponsor of the footballing giant Real Madrid. A sale or joint venture with an Asian manufacturer would address one of the biggest problems it faces: its bloated overheads, largely stemming from its dependence on well-paid German factory workers.

One source said: “Siemens has offered a dowry of anything up to the closure costs. But nobody sees any value in it.�

Siemens Mobile plunged into loss last year, and has recently suffered a sharp fall in sales because of problems with its 65-series handsets. Richard Windsor, analyst at Nomura International, said he expected Siemens Mobile to lose €480m this year, which he considered “massively substantial. This is cash going out the door�.

As the standard-bearer for industrial Germany, Siemens is under political pressure not to make large-scale redundancies among the unit’s 4,000 staff. Windsor said: “Closure is absolutely the last option. The company tends to put its employees before its shareholders. It will avoid cutting costs. It will avoid making people redundant.�

If Siemens fails to find a buyer, Windsor expects the group to try to fix the mobile business, at least for another three quarters.

Siemens would not comment on the cash incentive. A spokewoman for the company said: “We are looking at all the options, and won’t have anything to say before we have made a final decision.�

Siemens did try to get fashionable with its Xelibri brand- 4 highly fashion orientated phones released in "seasons". It bombed. Design was good, software/featureset was crap (ive got 2). so Im not sure about the great engineers. And the marketing was bollox too.

That could explain why the management are now a bit risk averse.

Oh- and the SK65 phone is nothing new- look at the Nokia 6820 and the Motorola V70 (the latter is not even made anymore)

Heh and was it siemens that put out the "camera handy" with the camera as a whole separate unit that had to be plugged into the rest of the phone? I was shocked when I saw that. Their marketing team must be on some mean drugs. They should stay out of the consumer market and stick to what they are good at, fixed large scale capital infrastructure projects.

good luck to all those TT'ers who work for them

I work for them, and I'm not fussed what happens to be honest... have a safety net.

But Kza, my God you don't half talk out of your arse at times, how DOES the wife put up with it?!


They must be on some profit-boosting drugs... I work with the accessory division and that product swept the board last year. It was a fantastic idea, rescuing the phones division by providing them with a camera until they managed to integrate one into their phones. It wasn't meant as a long-term product, and it more than served its purpose.

It's not much of a secret that mobile phones are commodities and lose money for most of the companies who make them is it? I don't think that's unique to Siemens...

been reading this thread and thanks to all TT´rs for the good wishes and luck but it aint apocalypse now or armageddon. we shall surrive. not until i see liv tyler teary eyed, while i leave on a jet plane!!!dramatic nah!!
got carried away a bit but i think so are the papers.

I don't know what all the hype is about, but there is to be a new company to do away with all cell phone companies. All you need to do is to buy the equipment and you can call anywhere around the world for free without all the charges...fees...and hassles that you deal in everyday life with all the cell phone company wankers out there...
stay tuned...

I'm not sure if Xelibri can be called fashionable. Compared to what was already selling in the Japanese & Korean market 2 years ago - Xelibri was basically a very expensive joke that Siemens played on its shareholders. Being holed up in Germany where the mobile phone market is very conservative and not too inspiring - Siemens basically created phones that will sell in German speaking countries i.e. big and full of features, value-for-money and at least 6 months behind the market leaders. If they had set up R&D centres in early 2000 in Japan & Korea to catch the trends in 2 of the most advance mobile markets and tried to compete there - they could probably had come up with better products for the rest of the world. In these 2 markets even market leaders like Nokia and Motorola struggle with very low market share - but they want to be there to tap the trends and technologies in these leading edge trend setting markets.

The Xelibri phone was flimsy in design, finishing was poor, userbility was practically forgotten - I would say the phones were crap. I hoped that the Siemens AG Board removed all executives that were involved in making that decision - as the shareholders paid very dearly for the tomfoolery. Siemens had to dump the Xelibri phones at discount stores across Europe just to clear the stock - this really shocked the market as it shows a lack of understanding of the market and started the slides backward.

Turning to OEM to design and manufacture mobile phones is a sure lose situation. Product life cycle is like 6 months for a mobile phone and market leaders are like launching 40 new products a year - there is not much room for delays, slow decision making and being second best. Working thru' OEM only meant that Siemens is working with yesterday technology delivering products that will be at least 6 months behind the market leaders and having to sell at deep discount just to move dead stock. I can assure you there are better way to deploy the shareholder's money.

God bless those that are still on this "unsinkable" ship called Siemens Mobile Phone for it has hit a big iceberg straying into dark water without proper navigation equipment - "they were still navigating by the stars" and the officers are still in a state of disbelief and denial. Just read the statements made by its senior executive in Cebit.

God bless them all.

JM

if it has taken a phone (or series of phones) to bring down Siemens mobile division, i wonder how motorola and ericcson survived those dark old days with the crappy flip phones with a one colour display the size of a matchstick?

I thought Ericsson were one of the first companies (out of the big 5) who produced a colour screen with the T68??

Er, if anyone actually had insider information, would they be divulging it here? (Ignoring for one moment ananonymouscoward's "Amazing" thread.)

Not many people realised that Motorola and Ericsson have network technolgies that span from GSM, CDMA to 3G. The North American market, the North Asian market of Japan, Korea and China have like 20 to 40% CDMA penetration - you can't really be a global market leader if you only compete in GSM. That is why Sony found Ericsson so attractive. Even Nokia has developed its own CDMA chipset to get into the CDMA segment.

Siemens Mobile is basically a GSM player with focus on the German\European market. GSM is an ailing technology - the future is more into CDMA and 3G related technologies. Siemens do not have CDMA or 3G technolgies - that is why it is not able to find a JV partner - even up and coming Chinese companies are giving Siemens a wide berth. I would classify Siemens Mobile together with Philips, Alcatel and Sagem in the DOG segment of the BCG quadrants - as it lacks marketable core competences that are essential for growth in the global mobile business.

If you you look at the whole Siemens Mobile story - it is more a matter of Style over Substance. The investment in F1 racing, Real Madrid soccer sponsorship - the whole Xelibri fiasco. It would have been cheaper for the Siemens AG Board to hire a good PR agency and give them half a billion Euro and let them invest the money in building Siemens as a corporate brand - than to spend Billions on the Siemens Mobile business - and get embarrassed by the financial performance at each investor's meeting.

Really the whole Siemens Mobile story has been a value destroying exercise for the shareholders. The only winners are the sub-contractors who turn out crappy phones for Siemens and yet get paid.

Ok, I'm terribly uninformed. What is the difference between Siemens Mobile and Infineon's mobile division? As I understood it, Infineon split off from Siemens (or in some permutation), and they are also involved in the mobile area. Why would Siemens (or why would have Siemens) continued to maintain a mobile division?

Ahem. Siemens Mobile makes/markets/sells the handsets.

Infineon has a division that designs/fabricates/assembles chips for handphones, which they sell to handset makers, like Siemens, Nokia, Samsung, etc.

yep. Just look in any shop, you'll find cellphones with "siemens" written on them, but not with "infineon". Infineon produces chips that go in the phones, Siemens designs, produces and sells the phones. At least, until Wednesday... then we shall see.

What's supposed to happen on Wednesday??

The quarterly results get presented, along with the management decision on the future of Siemens Mobile.

It's been in the press since February, no secret: it will either be closed, sold, "sanitized" or made into a joint venture with a partner.

But I don't think the final strategy will be declared on Wednesday as the word in the corridor is, it's still being negotiated.

wow!! they realy worked on narrowing the options down!!

@JB / @arshoo: do keep us updated what happens in the Quarterly report on Wednesday ya.

And btw, why does it seem there are so many non-locals in Siemens Mobile compared to other divisions of Siemens?

yep, great management, german-style... the best thing was, one of our top managers went to the press and told them his personal opinion.. without checkig internally first. And he's still here, on his top salary...

But I have to say, the new head of Siemens, and the new head of Siemens Mobile are really making headway and seem to have sorted it all out. So I'm more relaxed now, in January they were just keeping quiet (having promised to inform us), but now it is clear they have nearly finished the deal, and the message is clear that it's a positive step for us. We just have no clue what it is...

@ Why8... it is international because we rock Most other Siemens units are more industrial and "German", mobile involves more marketing, innovation and stuff like software, which needs and attracts a wider range of qualified (and young) people.

just found this on the web, so it's no secret: apparently we're getting a partner, but it's not finalised yet. Rumours are rife, Acer denies they're in talks, and Motorola has been mentioned a lot in the press.

Hence no final statement on Wednesday, more's the pity.

I'd prefer Motorola over BenQ but both could help

he he he, here's what my supplier says about BenQ, a competitor in his previous job:
"Their product was dead within 5 min….I hate this company because huge advertisement but poor quality.

Do you know what we name them? BAD Entertainment No Quality…"

and that is from an Asian supplier!!!

I'll say a prayer for you JB and arshoo as well as my shares in the failing company

hey, Siemens shares are up, up up today!

whatever happens, action of any kind will help the shares. Anything to cut to debt bill and/or make it a success...

As I know BenQ is just another subdivision of Acer, or did they really split from Acer?

It would be good news for you guys if Motorola takes over, they have great policies towards their employees, I would apply too if it´s Motorola...

As for Taiwanese management, well, no comments...

Yep, BenQ is associated with Acer and is the fastest growing taiwanese cellphone manufacturer. So I guess the partnership would be logical to tap both markets.

Motorola has been discussed for years, before I joined it was already in talks that Motorola would take over the phones in return for Siemens taking over the networks. Who knows.

As far as we are concerned, as long as we hear some news soon, the details will be irrelevant for now! Everyone is sitting on their hands, waiting on project decisions in case the news will affect their actions... bad for business and morale. But there is a buzz, it's positive...

I heard Motorola might be cutting some people in Europe , there should be something in the news this week about it. I wouldn't bet on them taking Siemens Mobile.

I had a meeting with three people from Siemens today. They mentioned they were curious about what decision would be made later this week. I should have read this thread before going out.

One of the rare occassions when not going on the internet was a bad idea.

If it´s BenQ, learning Mandarin maybe a good idea. I´d bet you´ll see some Taiwanese coming over here soon enough.

yep, alread took my first VHS course thanks (but then I have an office in Taipei, so this would be no big change for me)

as for cutting people at Motorola... depends where. Siemens cut 700 people last month, none were at Mobile depsite the losses. All were from fixed networks, plus central departments were offered (very good) voluntary deals. No one was forced out. And if a merger creates synergies... well, that's business.

We shall see. Just frustrating that they've announced that it won't be made official this wednesday.

BenQ does great LCD displays. My last one was from them, good stuff, great value.

They will get market share in Europe with or w/o Siemens.

Apart from that: This whole "I dont know whats gonna happen, so I'll just sit around and not do anything" it gets on my nerves.

We continue to work as best as possible. Everything else is not an option in my view

do you think that Toytown had anything to do with the failure of Siemens Mobile Department ?

They've started cutting costs in other ways too: by removing the canteen subsidy for contractors/externals. Bastards.

Absolutely, I'm working harder than ever now as I can see light at the end of the tunnel. No point waiting to see, as it could take a while.

But I can understand people holding on when committing the company to major contracts with potential penalties if our strategy gets changed and the project is stopped...