Nokia, Siemens merging phone equipment units
Big news in the wireless industry: the Wall Street Journal is reporting that Nokia, the world's number one handset manufacturer, is planning on merging its phone equipment unit with that of Germany's Siemens AG to create a company worth an estimated $31.5 billion. Even though both parties will have equal ownership on paper, it is clear that Nokia will exert more influence on the new entity, as it will be based in Finland, led by Nokia executive Simon Beresford-Wylie, and have a board controlled by Nokia-picked members. Besides the $1.58 billion in annual savings that both companies will realize in eliminating duplicate R&D operations, the real benefit of the merger will be the stronger market position held by the combined units in the face of growing competition from Asian manufacturers. According to the Journal (subscription required, as usual), the two companies will formally announce their plans tomorrow.[Thanks, John]
Filed under: Nokia
Reader Comments (Page 1 of 1)
Jukka @ Jun 19th 2006 3:32AM
Hello, its both companies network infrastructure functions that are being combined, not phone functions.
vincent @ Jun 19th 2006 4:17AM
No, not "mobile phone makers", but rather "mobile phone equipment makers". They are not the same. In this case, it looks like it's a merger of Nokia and Siemens' network equipment divisions, which should allow them to compete more effectively with boutique companies like Ericsson and Lucent. Yup, I feel their pain too.
From reading the linked story, it doesn't even look like this agreement extends to mobile phone chip sets, or any other part of the consumer end of the business.