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NEC Teams with Siemens to Develop Mobile
Phone Technology
By Peter Poole-Wilson at Bloomberg News
24 March 1999
NEC Corp., Japan's No. 1 maker of personal computers and
microchips, and Siemens AG of Germany, Europe's No. 3
phone equipment maker, said they agreed to develop and sell
future generations of mobile phone system products.
NEC and Siemens will form a joint venture this year based in
Europe to develop and sell wideband-code division multiple
access (W-CDMA) technology equipment for use in cellular
phone networks. W-CDMA is capable of sending a larger
amount of data and moving images than the current PDC -
personal or Pacific digital cellular - standard in Japan.
The partnership enables NEC and Siemens, which make
equipment for different mobile phone standards, to pool their
knowledge from the design stage for products using
W-CDMA. That's important because W-CDMA is expected to
be compatible with the Global System for Mobile
communication (GSM) standard used in Europe and most of
Asia, of which Siemens is a leading maker.
"This agreement is aimed at the world," said NEC Executive
Vice President Masami Shinozaki.
NEC expects cellular phone operators to offer services using
the system from 2001 in Japan and 2001 in Europe. NEC hopes
the two companies will be able to capture 20% of the global
market for cellular phone systems equipment, Shinozaki said.
The agreement will help NEC, which is committed to supplying
W-CDMA equipment to NTT Mobile Communications
Network Inc., or NTT DoCoMo, to speed up development and
cut costs, Shinozaki said at a news conference.
It also secures further access to the Asian market for
Munich-based Siemens, which is trying to push into the Asian
market by selling equipment such as W-CDMA base stations
in Japan in conjunction with its GSM products.
The NEC-Siemens partnership will be confined to the
development and sale of W-CDMA equipment such as
wireless base stations, meaning the companies won't make the
products together.
"This isn't a manufacturing agreement," said NEC's Shinozaki.
The venture will probably start with capital of between 1
billion yen and 2 billion yen ($8.5 million-$17 million), said
Shinozaki, who stressed that was his personal estimate and
that no figure has been decided. NEC and Siemens will each
supply 50% of the capital, he said.
NEC chose Siemens rather than Ericsson AB of Sweden, the
world's No. 3 mobile phone maker, or Nokia Oyj of Finland, the
world's No. 1, because "our impression was that they wanted
to go their own way," said Shinozaki. NEC shares fell 54 yen,
or 3.8% to 1,360. Siemens shares fell 0.33 euros to 60.52 in
early trading.
Copyright 1999, Bloomberg L.P. All Rights Reserved. |
