Siemens mum on handset unit, launches WiMAX system

Siemens launched a WiMAX system but remained mum on future of its mobile phone unit.

Siemens was unable to avoid the inevitable at the 3GSM World Congress in Cannes: questions about the future of its mobile phone unit.

"We have not reached a decision on the future of this business," Lothar Pauly, chief executive of Siemens' newly organized communications division, told journalists Monday at a news conference at the wireless conference and exhibition.

Of the four options open to Siemens - merge, sell, fix or close - two require a partner, Pauly said. "We don't want to execute the closure option," he said. "That would destroy too much value."

Pauly declined to comment on rumors of a merger with NEC's mobile division.

The mobile handset unit is losing Euro 1 million (AUD$1.6 million) a day, Pauly said. Siemens has launched a program aimed not only at reducing losses but also at injecting new product ideas into the unit, he said.

The executive admitted that Siemens is playing a game of "catch-up" in the market for 3G (third-generation) handsets. The company, he said, plans to launch its first 3G (third-generation) phone, the SXG 74, at the Cebit trade show in Hanover, Germany, next month, and another later in the year.

Told about rival Motorola Inc.'s plans to launch 16 3G phones this year, Pauly said he, too, would like to offer more.

"We are late in delivering 3G handsets but not in delivering 3G infrastructure equipment," Pauly said.

Of the 29 contracts awarded for 3G networks based on WCDMA (Wideband Code Division Multiple Access) technology in 2004, a quarter of them were given to Siemens, according to Pauly.

Siemens made several wireless product announcements at the show. Among them is what the company claims to be the world's first WiMAX high-speed wireless Internet system of base stations and modems based on the IEEE 802.16-2004 specification. The product, SkyMAX, can be upgraded to the planned 802.16e standard, which will allow users to maintain WiMAX connections as they move from one zone to another, according to Siemens.

Siemens also unveiled its first PC Card based on HSDPA (High Speed Downlink Packet Access) technology. The technology is a evolution of 3G designed to offer higher download speeds, up to 14M bps (bits per second).

The Munich-based manufacturer plans to offer PC cards for other wireless access technologies, including Flash OFDM (Orthogonal Frequency Division Multiplexing) and WiMAX, according to Pauly.

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