Lucas van Grinsven
BARCELONA: German electronics conglomerate Siemens AG said on Monday it would
like to offer a mobile phone technology which dominates the Americas and South
Korea, but would not comment on rumors it might seek to buy a unit from Motorola
to achieve that goal.
US giant Motorola, which said last week it wanted a partner for its mobile
infrastructure business, offers the CDMA network technology that Siemens does
not have at the moment.
Siemens Mobile chief operating officer, Lothar Pauly said CDMA and CDMA 2000
technology would be used in 20 or 30 per cent of the wireless networks around
the world, remaining a small challenger to the current standards GSM and new
UMTS networks that will be used in the remaining 70 to 80 per cent of networks.
"It's not a necessity (to have CDMA), but it would be nice to have
it," he told investors at a conference organized by investment bank Credit
Suisse First Boston in Barcelona.
He added Siemens was not going to develop the technology itself, which
immediately raised questions if the German company was in talks to buy the unit
from Motorola. Motorola and Siemens are already cooperating in mobile handsets,
with Motorola providing Siemens with new third generation phones and chips.
"We're not going to develop CDMA. It would be crazy to spread our
research and development on more than two technologies, GSM/GPRS and UMTS,"
Pauly said. "I have no comment on rumors," he said in reply to the
questions if it was interested to take over Motorola's unit.
Motorola phones
Pauly also gave an update on the new Motorola phones Siemens will rebrand
and sell as of the fourth quarter of this year. The new dual-mode phones,
capable of working on existing second generation wireless networks as well as
soon-to-be-launched third generation (3G) networks that are designed for data
communications, will come out of interoperability tests in June.
"They will be workable in a commercial way in the fourth quarter,"
Pauly said, putting the company on a par with Nokia and Sony Ericsson.
He added a second 3G model, with all of Motorola's hardware inside, but
designed by Siemens and with Siemens software inside, will come out in the third
quarter of 2003. Siemens will move to its own model by early 2004 with only a
Motorola semiconductor inside.
Pauly added he expected another 10 per cent decline of the average price of
its mobile phones this year, as the company continued to move to lower priced
models for developing markets.
"Average selling prices might go down by another 10 per cent maximum
from now until Christmas. In the fourth quarter I expect an increase, not driven
by (recovering) demand, but because several new handsets, that we have not yet
shown, will come onto the market," he said.
Global mobile phone sales are expected to remain little changed at around 400
million units this year. Rapid growth has stopped in the wake of lower subsidies
by operators and high penetration in developed markets, without new services to
drive replacement sales.
Siemens sees continued growth in developing markets for which it produces
cheaper phones of less than $100 on which it claims to achieve good profit
margins. Pauly said the low-end market will be 40 per cent of the global market.
Siemens is the world's fourth largest mobile phone maker with a market share of
around eight per cent, challenging the recently combined mobile phone operations
of Sony and Ericsson.