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Technology Stocks : Newbridge Networks -- Ignore unavailable to you. Want to Upgrade?

To: ubrx who wrote (9500)	2/10/1999 9:40:00 AM
From: Ian@SI	Respond to of 18016

How about $50US? :-) The Wall Street Journal -- February 10, 1999 Siemens to Form New Firm to Expand On Array of Data-Networking Products ---- By William Boston Staff Reporter of The Wall Street Journal BERLIN -- Siemens AG of Germany plans to take another step next month in its catch-up game with U.S. Internet technology firms with an acquisition that it plans to set up as a separate company. Volker Jung, Siemens management-board member in charge of communications networks, told reporters at a conference in Berlin that the electronics giant was keenly interested in filling holes in its offering of data-networking products that guide traffic on the Internet. "We're going to do something in this area and in Internet access equipment," he said. "It will come to a small investment next month and will also involve forming a new company in the U.S." Mr. Jung wouldn't elaborate on the company's plans. Siemens is a leading maker of telephone-networks world-wide. But it has been slow in addressing the explosion of the Internet and the increasing importance of Internet technology as a platform for integrating various types of communication. It has a significant partnership with 3Com Corp. and Newbridge Networks Corp. but has said repeatedly in recent months that it needs to buy data-networking companies to beef up its offering to catch up with companies such as Cisco Systems Inc. and offer a full palette of networking products. But at the same time Mr. Jung dismissed the huge mergers in the industry as "wasting shareholder money." "We will not buy anything at these exorbitant prices, but at the same time we must be flexible," he said. "We prefer teaming and partnerships to megamergers at overblown prices," he said. The boom in data networking, driven by the rapid expansion of the Internet, took big telecom-equipment makers like Siemens and its competitors Lucent Technologies Inc., Northern Telecom Ltd., Telefon AB L.M. Ericsson and Alcatel SA by surprise. In a move to back into the expanding market, Lucent recently agreed to acquire Ascend Communications Inc. Mr. Jung was speaking at a conference to introduce Siemens's business division, information and communications, which it formed last year to develop a broad array of products and services that integrate computer technology and telecommunications. He said he expected restructuring of the division to be more or less completed by 2002. The company has been divesting itself of unprofitable businesses or businesses that can't achieve global leadership. It is also making acquisitions in some areas, such as data networking, where it wants to become a leading player on the global market. Barring any worsening of the economic situation in Asia, Russia or South America, Mr. Jung predicted the division's sales would rise to as much as 54 billion marks ($31.3 billion) in the business year that ends on Sept. 30 from around 47 billion marks last year. "We want to grow faster than the market, which is growing around 10% a year," he said. Citing industry forecasts, he predicted that the global market for information and communications products and services would reach 1.4 trillion euros ($1.6 trillion) in five years. The sales forecast boosted Siemens's shares in Frankfurt trading. The most heavily traded stock on the DAX index of German blue chips yesterday, it fell 1.6% to 61.10 euros. At the upcoming CeBIT information technology fair, Europe's biggest, that takes place in Hanover next month, Siemens's information and communications division said it plans to display new products that include a palm-top device that will be priced below 3Com's popular Palm Pilot, a display of power-line technology that allows voice and data to be transmitted over power lines in a home or office building, and a new low-cost mobile phone. "Our goal is to become No. 3 in the mobile-phone business," Mr. Jung said. "We will invest a lot of money and we'll probably partner with somebody to lower development costs." The first step to crack the mass market for mobile phones is the launch at CeBIT of its C25 cellular phone, a small phone that lets users "roam" between different cellular networks based on the global system for mobile communications (GSM) and will cost around 400 marks. Roland Koch, head of the Information and Communications Networks Group, said Siemens was determined to break into the U.S. market for mobile phones for UMTS, the so-called third generation of cellular-phone networks. It was still too soon to put out products because of battling between European and the U.S. over standards. "We will heavily fight to be in the U.S. in the third generation," he said.