A German newspaper reported last week that Motorola Inc. is looking into buying Siemens A.G.’s money-losing telecom equipment unit, Com. The Allgemeine Sonntagszeitung reported that Motorola is mostly interested in the profit-bearing Mobile Network division of Com, but Siemens wants to sell Com in its entirety.
Com is Siemens’ largest unit and employs some 55,000 people. The unit’s operating profits slipped 13 percent to $396 million from $4.2 billion in sales during the first fiscal quarter. Com’s losses would have been about $52.7 million for the quarter, but the sale of its stake in Juniper Networks Inc. helped stave off larger losses.
Reports have also surfaced about Com’s leadership having been in talks with other companies interested in the company, including Nokia Corp.
Daniel Longfield, an analyst with Frost & Sullivan, believes Motorola would be well-served to acquire Siemens’ telecom networking capabilities and noted that Motorola is eager to spend the massive windfall it raked in from sales of its landmark device, the Razr V3.
Regarding Siemens, Longfield said, “I think there is a concerted effort at Siemens, at a corporate level, to be like GE. This means only competing in markets it can dominate and are very profitable-neither is the case in telecom.”
The German paper said Siemens’ board of directors is set to meet April 24 and would likely discuss the future of the Com unit.
Siemens has been focusing on healthcare and power technologies, which generally produce more reliable earnings than electronic equipment.
Siemens and Motorola declined to comment, but Motorola did announce plans last week to acquire privately-held wireless Ethernet provider Orthogon Systems. Motorola said it expects the acquisition to advance its growing wireless broadband business, supporting its MOTOwi4 products for WiMAX, mesh solutions, as well as its Canopy products.
Motorola further explained that Ashburton, U.K.-based Orthogon has installed thousands of its patented intelligent radio wireless links, connecting disparate networks for corporations, service providers and municipalities in more than 50 countries.
OFDM technology bridges the “last mile” via an all-Internet Protocol architecture with high speeds to connect PCs and laptops in homes or small businesses. The technology can also serve as a fixed wireless access system.
“Orthogon is at the forefront of innovation in wireless OFDM point-to-point solutions and is highly complementary to Motorola’s MOTOwi4 wireless broadband capabilities,” stated Greg Brown, president of Networks and Enterprise business at Motorola. “Orthogon products and technologies will advance Motorola’s vision of seamless mobility by providing customers with easy, uninterrupted access to communication and information.”
Motorola said it has been distributing Orthogon’s products through its Canopy business since 2004 and owned a minority stake in Orthogon through its venture capital arm, Motorola Ventures.
Terms of the transaction were not disclosed, but Motorola said it expects to close the deal within the first half of this year.
