Through TheFLY's Eyes: Nokia & Siemens
Nokia, Siemens Announce Joint Venture
Nokia (NOK) and Siemens (SI) announced Monday that they will combine their phone equipment units.
The duo expects to realize annual cost savings of $1.9B or E1.5B by 2010, the companies said. Each telecom/mobile giant has come under pressure from increasing high-quality and lower-cost Asian competitors. Nokia and Siemens also face strong competition from duos Alcatel/Lucent and Ericsson/Marconi, as sector players world-wide team-up to achieve greater economies of scale and broader distribution networks, among other operational strengths.
The markets initial response Monday to the announcement was favorable as Siemens shares surged $4.92 to $84.72 and Nokia’s shares rose 26c to $20.23.
Analysts in the Reuters survey expect Nokia in 2006 to register EPS of $1.29 on revenue of $49.6B. They expect Siemens to earn $5.43 on revenue of $112.3B.