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Monday, 1 October, 2001, 15:32 GMT 16:32 UK
Motorola and Siemens 'in tie-up talks'
Siemens mobile user
Handsets have become a fashion accessory
Motorola, the world's second biggest supplier of mobile phones, is reported to be in talks with Germany's Siemens about a possible link-up.

According to the Wall Street Journal Europe (WSJE), the two companies are discussing a possible joint venture for either their wireless infrastructure or their handset businesses.

A deal could create ventures with a total value of $20-25bn, WSJE said, citing sources close to the talks.

But, the newspaper added, there was unlikely to be a full-blown merger between the two companies.

Sony, Ericsson and Nokia

The news came as Sony's joint venture with Swedish mobile maker Ericsson was officially launched, although the first new product bearing the names of both companies is unlikely to be seen until this time next year.

Sony Ericsson logo
Sony and Ericsson have launched a joint venture

Sony chief executive Nobuyuki Idei said the first joint venture product is unlikely to be aimed at the third generation (3G) mobile phone market, as some industry observers had hoped.

Meanwhile, the world's biggest mobile maker, Nokia, which has so far weathered the downturn in mobile sales, said it was in talks to cut 260 jobs from its main Finnish plant.

Question marks

Industry sources say Siemens is considering a number of options for its mobile business, including a wider alliance with Japan's Toshiba, with which it is co-operating over the development of new generation handsets.

A joint venture with Motorola would open up the potentially huge US market to Siemens.

But question marks remained over brand positioning and differing technical standards.

Mobile companies have struggled to come up with a response to a sharp slowdown in demand for handsets and growing scepticism about the next generation of mobile internet services.

Siemens' mobile phone operations made an underlying loss of 51m euros (31.6m; $46.7m) in the three months to the end of June.

Motorola, which last month issued the latest in a series of sales warnings, has this year announced plans to shed 32,000 staff, cutting its workforce by one fifth from the level at the end of last year.


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See also:

19 Jul 01 | Business
Nokia profits down 20%
03 Aug 01 | Business
Siemens 'to increase job cuts'
07 Sep 01 | Business
Motorola cuts more jobs
28 Aug 01 | Business
Ericsson and Sony in mobile tie-up
23 Jun 01 | Scotland
Motorola phone offer 'an insult'
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