Siemens has entered into discussions with other mobile phone manufacturers in the hope of merging their handset-production operations, the company has announced.
In giving up its independent mobile phone manufacturing business, Siemens is following a similar strategy to Sweden's Ericsson Telephone, which announced earlier this year it would combine its handset operations with those of Japan's Sony.
The company believes that over the long term only Finland's Nokia, the world's leading mobile phone maker, can survive in the handset business without partners, according to Siemens spokesman Alex Heim.
Heim declined to name any of the companies Siemens is considering as a partner.
Siemens slipped from fourth to fifth place in the global mobile phone market in the third quarter, according to figures released last month by research and consulting firm Dataquest, a division of Gartner. The German company sold 6.8 million units during the quarter, taking 7.2 per cent of the world market. In the same quarter of 2000, Siemens sold 9 million handsets, an 8.7 per cent market share.
Nokia, by contrast, shipped 31.6 million units last quarter, or 33.4 per cent of the world market.
Siemens lost some $US19.4 million before interest and taxes on its mobile phone business during the quarter, the company said in financial results released last month.
But Heim said that the losses were largely due to a one-time write-off, without which the company's mobile phone manufacturing would have earned some $US40 million.