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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: Rich Bloem who wrote (44946)	3/8/2005 11:29:11 PM
From: Jon Koplik	Respond to of 196546

WSJ -- Handsets Still Plague Siemens ................................................... March 9, 2005 Handsets Still Plague Siemens Despite Recent Optimism, Business May Be Shut as Losses Persist By MATTHEW KARNITSCHNIG Staff Reporter of THE WALL STREET JOURNAL MUNICH, Germany -- At a dinner reception atop Siemens AG's headquarters in early August, Lothar Pauly, the head of the engineering giant's telecommunications division, passed around the company's hottest new cellphones as he explained his strategy to revive Siemens's handset business. Mr. Pauly boasted to his dinner audience that Siemens, then the No. 4 handset maker, could take on all comers with unique innovations such as its SK65, a black-and-silver, e-mail-enabled phone with a hidden keyboard. "Innovation is the only way we can withstand the price pressure," Mr. Pauly said. Siemens expected the unit to book a profit that quarter. Seven months later, Siemens has dropped to No. 5 among handset makers and is a whisker away from falling another rung lower. Siemens's handset business has continued to post losses since Mr. Pauly made his prediction -- at a rate of about €1.5 million, or roughly $2 million, a day in the latest quarter -- and there is no end to the losses in sight. At a presentation yesterday, Mr. Pauly declined to predict when the business would return to a profit, saying only that he had a plan that includes about €1 billion in cost cuts. "I am not amused about this situation at all," he said. The continuing losses have led Siemens to acknowledge that it could be forced to shut down the business after nearly two decades. The unit's performance has put pressure on Mr. Pauly as well as on the man who hired him -- Siemens Chief Executive Klaus Kleinfeld. Before taking over as chief executive in January, Mr. Kleinfeld oversaw Siemens's telecom divisions. He handpicked Mr. Pauly to restructure the business by merging the company's fixed-line and wireless divisions. While a number of Siemens's telecom units -- in particular, its wireless network division -- are doing quite well, that success has been overshadowed by the handset problems. A Siemens spokesman said that fixing the handset business was at the top of Mr. Kleinfeld's list of priorities but that the problem was complex and a solution would take time. "This isn't something that can be dealt with overnight," the spokesman said, adding that the company's goal was to find a long-term solution. Mobile phones, which account for about 7% of Siemens's €75 billion in revenue, occupy only a small corner of Siemens's vast empire of 12 divisions. Nevertheless, handsets have been at the center of the company's efforts to build a global brand around innovation and technical expertise. Yet after nearly 20 years of trying, Siemens has failed to reach its goal of becoming a top-tier handset maker alongside Nokia Corp. and Motorola Inc. Far from helping Siemens's image, the handset division threatens to undermine it. In addition to the losses, the unit has been plagued by quality problems. The SK65, the model Mr. Pauly unveiled in August, was slated to hit stores in November, in time for the holiday shopping season, the most important for handset makers. But production problems delayed its debut by months and the SK65 didn't become widely available until February. Other models in the same line of handsets had to be recalled in August over concern they were so loud they could cause hearing damage. Insiders say Siemens's bureaucratic corporate culture isn't suited to the fast-paced, consumer-driven mobile-phone world. Decisions over new products and which features to put on phones go through numerous layers, creating delays that can hobble a product before it even hits the market. This year, Siemens plans to introduce only two so-called 3G phones, which offer the latest in high-speed wireless technology. By comparison, Motorola and Nokia each are expected to present 10 to 15 new 3G models. Mr. Kleinfeld has been largely silent on what his strategy is for the phone unit. So far, the company's efforts to sell the business or find a partner have failed. Analysts say Siemens's best hope is to restructure it and then sell it, a process that could take years. Yesterday, Mr. Pauly said the company would cut costs by trimming spending for marketing and by pulling back -- though not withdrawing -- in some markets where it is weak, including the U.S. Write to Matthew Karnitschnig at matthew.karnitschnig@wsj.com Copyright © 2005 Dow Jones & Company, Inc. All Rights Reserved.

To: Rich Bloem who wrote (44946)	3/9/2005 11:48:15 AM
From: A.J. Mullen	Read Replies (1) \| Respond to of 196546

Yes Rich, I did stop at the Iridigm display, but they were only mock-ups - not the real thing. The lady at the booth said they were expecting production in 2006. Irwin said in the "next couple of years" during his presentation. I have mixed feelings about Iridigm. I think it's exciting technology and probably a good investment but I wonder if Qcom needed to get involved. There's no lack of interest in better displays, I think they'd come without Qcom's intervention. My biggest concern is not for Qcom though. I also own Microvision, another Mems company. Ashley