NEW ORLEANS-Siemens AG announced it will re-enter the U.S. mobile-phone market in 2001, about two years after it left the market unable to compete with rapidly falling handset prices in the United States.
Siemens always has maintained its exit from the U.S. market was a temporary one. Since it left the Global System for Mobile communications market early last year, with one phone model in its product line, it has been developing a portfolio of wireless products for the United States. Sony Corp., Oki Telecom and Bosch Telecom Inc. are among the U.S. handset market’s casualties. They all struggled with falling handset prices and a lack of broad product lines.
So what is different about today’s market? Siemens mobile-phone business has focused heavily on gaining market share in Europe. The German vendor sold 11 million units worldwide in 1999, twice that of the previous year, and it plans to sell 30 million units this year. Its goal is to be among one of the world’s top three mobile-phone suppliers over the long term. It needs the U.S. market to do this.
“2.5G and 3G is the breaking point,” said Prodip Chaudhury, director of product planning & systems engineering with Siemens Information and Communication Networks Inc. “It’s a good time to come into the market.”
Not only will Siemens re-enter the market with GSM handsets, it also plans to introduce Code Division Multiple Access handsets and Time Division Multiple Access handsets as well. It scrapped plans to offer its own CDMA handsets in 1998, wanting to focus its energies on the GSM handset product line. Siemens reportedly was in talks to purchase Qualcomm Inc.’s CDMA handset division, but lost out to Japanese vendor Kyocera Corp. in December. Siemens isn’t ready to announce its specific strategies for entering the U.S. market.
Effective April 1, Siemens will combine its infrastructure and handset business into a new group called Information and Communication Mobile (ICM). Siemens believes a vendor’s advantage in the data revolution will lie in its ability to offer an entire portfolio, including network infrastructure for both fixed and mobile networks, solutions and services and terminal devices.
