The company’s market share in China has taken a battering in recent years as a result of competition from fast-expanding local suppliers, but Siemens is pinning its hopes on a recently completed sales and product development venture with Ningbo Bird Co Ltd, which claims to be China’s largest supplier of handsets.
The agreement with Ningbo will give Siemens a channel to the company’s network of 30,000 stores.
Siemens chief executive Heinrich von Pierer has denied that the deal is the first step in leaving the handset business. Ningbo Bird is not an exit strategy, he said.
However, two struggling European handset business have already ended up in China. In April, Alcatel SA decided to cede control of its struggling mobile handset business to China’s Huizhou TCL Mobile Communication Co Ltd. The French networking equipment company was to take a 45% stake in the as yet unnamed company with TCL Mobile taking the lion’s share, worth 55m euros ($65.2m).
In October 2001, Royal Philips Electronics NV signed a definitive agreement with China Electronics Corp to transfer its mobile handset activities to the Chinese group after struggling unsuccessfully for many years to make money out of the business.
