Siemens To Spin Off Mobile Division

Siemens said it will spin off its mobile devices business.
LISBON, Portugal — Facing substantial losses, Siemens said Wednesday (April 27) it will spin off its mobile devices business. The move affects not only mobile handsets but also terminal equipment and devices.

Siemens CEO Klaus Kleinfeld announced the transformation of the mobile device division into an independent company during a press briefing here. Besides mobile phones, Siemen wants to outsource cordless DECT phones, set-top boxes and other consumer appliances from the new group.

The new mobile unit will retain the Siemens brand name. "Any future partnering option will always cover Siemens mobile phones," Kleinfeld said.

Siemens' supervisory board has commissioned an evaluation of a "suitable legal form" for the mobile unit, added Siemens' CFO Joachim Neub¼rger. That process should take a maximum of three months. During the review, the new company will seek an international partner to strengthen its competitive position. Kleinfeld declined to name potential partners. "There are several options," he said.

Kleinfeld confirmed there would be no layoffs in Germany as a result of the move. Only a few months ago, Siemens had to cut mobile phone production dramatically to gain more flexibility. In return, it had to guarantee unions it would not cut jobs. "We will stick to Germany as [the new company's] production location. This is one of the criteria when selecting a partner," he said.

Siemens will not offer a financial "marriage" to attract potential investors. "The bride does not need spicing up, she is already attractive," said Kleinfeld, referring to the extensive patent portfolio that will accompany the outsourced division.

It appears that Siemens wants to retain at least parts of it mobile phone and telephone business. "We will go on working while looking for a partner," said Kleinfeld.

Siemens will soon introduce further cost reductions and new mobile phone models. The market has already reconsidered the mobile unit's position, concluded Kleinfeld, adding that the struggling division reported a positive book-to-bill ratio last month.

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