Siemens Information and Communications Products division, which arose from the company’s restructuring on October 1, is attempting to become a complete solutions giant offering the customer everything from systems integration through to products. But the newly formed division still has a number of obstacles to clear before it can hope to become a lean money spinner. The Information and Communications division currently employs 34,000 people, generates DM20m ($12m) in annual revenues and embraces five divisions; communications devices and mobile phones; computer systems – or PCs and servers; Communications Cables; IT Services; and Retail Systems. Among that large array of products and services, lies the manufacturing of mobile terminals, one of the areas that helped drag down Siemens’ overall financial performance. Although the group president, Rudi Lamprecht, recognizes the need to mass produce wireless phone sets to meet the needs of a highly commoditized market, where the style of a phone needs to be updated every six months, he has yet to detail publicly how the mobile terminal arm will turn a profit. The collapse of its OEM deal with the Acer Group, which would have resulted in Acer using Siemens’ German plant to manufacture IBM’s Aptiva PCs, now leaves the company with unused capacity at the plant, which currently churns out 1.5 million machines, but could produce up to between 2 million and 2.2 million PCs. Siemens also has to continue to shoulder the manufacturing of its own PCs in what is, again, a highly commoditized market. The division does not intend to lay out its shape and direction until a press conference in February, Lamprecht stressed the importance of the company’s systems integration arm, which he hopes will take on the likes of Anderson Consulting. Again Siemens faces a challenge – how to persuade customers that its systems integration arm will retain its neutrality and not recommend products from its sister divisions.
