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New models from Siemens. Introduction in Moscow on the 3. July 2003 or hard time for Siemens.

Siemens is paying more and more attention to Russian market of mobile terminals, finding it as one of the most promising in future. So, it was the reason why three new models are launched in Moscow. Apart from top-managers, journalists from all over the world will visit this presentation (totally about 700 specialists). It is the first event of such scale in Russia, other manufacturers didnt hold such meetings.

The presentation consists of three parts. First one will begin in 8 hours. It will be a report of Siemens ICM president Rudi Lamprecht, who replaced Piter Zapf not long ago. The company stated that this replacing was a usual event, which one shouldnt pay attention to. Unofficially there is an opinion that this replacing is connected with the fact that Siemens lost market share on GSM market and Samsung shoot ahead. Official representatives of the company dont like to comment this situation, they emphasize that Samsung has very strong positions on CDMA market. They forgot that CDMA-terminals are not sold in Europe. So, Siemens and Samsung conquer in one niche. For example, similar arguments were presented by Lotar Pauli, member of Simens ICM, when he gave us an interview. Full version of this interview will be available in a few days. According to analytic companies Siemens takes the 4-th place on European GSM-market today.

Rudi Lamprecht will touch upon several questions. The main idea became clear after the meeting with his colleagues, which was earlier. The company thinks that it is hard time for mobile terminals market today, the market is full, and people refuse to buy new models. So, developing markets with small amount of subscribers began to play very important role because they have a potential. The most promising European market is Russian market.

Siemens declares that it is the leader of Russian market (33%) and also the leader of the markets in Byelorussia (35%), Lithuania (34%), Latvia (33%), Hungary (33%), Croatia (32%), Bosnia (32%). We cant say about other countries, but position of the company on the Russian market and its leadership is under the question. In the end of the 1. quarter the company took the second place after Nokia. The same was last year. But even in the end of the second quarter Siemens took only the third place. Data will be published on the 15. of July (Mobile Research Group). Such weak results can be explained by active advertising campaign hold by Motorola to promote its products. Overstocking noted in the end of the first quarter also influence sales and became one of the reasons of their decreasing. One more reason to decrease official deliveries was Sidemens price policy different in different European countries. It was more profitable to import some models unofficially into Russia. According to estimations of Mobile Research Group gray market share of Siemens doubled in the second quarter 2003. Details you can read in the report, which will be partly published on the 15. July 2003.

Absence of new models in the line, strong gray market affects official sales. The company understands it and prepared several offers in the entry-level and youth segments. Traditionally the company has strong position in these segments. Having several successful models, the company begins to launch several new phones, which will conquer with existed models or replace them. Lets remember first visit of Rudi Lamprecht to Moscow this year. At that time the company declared that the market was polarizing and more phones will be sold in the entry-level and fashion segments.

This picture of the market segmentation is true. Besides, it can be proved by research data made be Mobile Research Group.

A question is how to conquer new market shares if there are no new products in developing market segments and new models are targeted to decreasing market segments. For example, entry segment has been stable during the year, though youth phones (in 130-170 price band) have been less demanded. Only the market share of phones in the high price group is increasing, but the company loses here because doesnt have products. Siemens SL55 is not in much demand, doubtly it will be demanded later. Advertising campaign (especially TV-clip) is not very understandable. We dont think that many people will desire to buy it after they view the clip.

Siemens SX1 will be demanded though its ergonomics is controversial (its rather difficult to input information because of the keys spacing). This phone is positioned as the most technological phone of the company. Its not even a smartphone. The problem is that user group of such devices is rather small. So, SX1 wont be a mass phone. Even successful sales of this handset wont influence the situation on the market. They can only increase average price for the phones from Siemens (now it is about 100USD on the Russian market (wholesale prices).

Below you can view market segmentation in Eastern Europe and areas of users interests. We cant compare data of both graphics directly, because for example, in Russia there is no focus on extra phone features. Later well return to the diagram of users interests.


So, the company will lose its market share, remaining in entry, middle (youth) and partly hi-tech segments. At the same time offers in growing segments are decreasing or remaining stable. Experiments with design are not very fruitful. Production of technologically advanced models is rather hard. Inside developments of the company are weak. There are not opportunities to introduce a phone with outstanding features. The company copies existed models and launches them later on the market. Earlier we wrote that Siemens licensed elaborations of other companies to produce own models. Many mailed us that the platform use in Siemens S55, SL55, M55 is own development of Siemens. May be it is so. Then, why the company launched a product, which almost copied Ericsson T68 launched one year earlier. Type of the screen used in these products is not widely spread. We can even say that it is used only in these two phones. Too many coincidences, which may be not so important separately but strikes together. We dont believe that Siemens made a clone of successful model of the rival company. Licensing is more plausible version.

At our site you can read about similarity of these phones.

New platform will be available only in next year. The presentation would be in October. Several facts can prove it. For example, Siemens completed an agreement with Hyundai LCD. According to this document the company will receive about 5.5.mln displays during 2004. STN-screens (up to 65000 colors) will be used in mobile phones (not smartphones). An agreement is valued at US$100 million.

This information allows to say that Siemens would equip its top phones with 65K displays (the resolution probably will be 128x160 pixels). Dont forget that today several phones have same features, for example, Sony Ericsson T610. Its interesting to read a discussion devoted to this problem at the German forum http://www.telefon-treff.de/showthread.php?s=&threadid=62270 (in German).

Secondly Infineon Technologies AG announced that Siemens will use its chipsets in new models, in particularly such chipsets as S-Gold, S-Goldlite. Both chipsets have similar architecture. They support 32-tones polyphony, integrated camera, EDGE, GPRS class 12, Java, color screens. It is mentioned about mp3 standard, which is not obvious. The conclusion is that phones which will be launched next year will support 32-tones polyphony. Other information is not available from the scarce press-release. Lets wait for the new year.

Today the company tries to utilize their platform and produce devices, different in design and some other not considerable changes. To some extent Siemens borrowed a business strategy from Nokia. The latter manufacturer also has a large model line based on one platform, which mostly differ in design and some added features. Now let us introduce three new models from Siemens.

Siemens A52. Lets take A55, cut several inside features and you receive a new model. The new handset is based on the same platform, has the same weaknesses and strengthens. It is the cheapest offer, so an expected price is about 65-70 USD. Due to low price the phone will be demanded on the market. Siemens A55 can be easily turned into G55. If the situation with A52 is the same, the phone will be very popular in the regions (of Russia). Many times this problem was discussed in forums in the Net.

Siemens C60. The company positions this phone in 150-200 Euro price band. It is a little bit more expensive than M55. Differences are minimum. The new model is almost the same as its predecessor. They are based on one platform. Price doesnt differ greatly, they will conquer due to attractiveness. While promoting this phone, Siemens emphasizes on MMS-messages, a possibility to send pictures, taken by external camera.

Siemens MC60. Once again it is a revised M55 with an integrated camera. Its a considerable change, but the phone moves to a higher price segment (200-300 USD). The company targets this phone to adults. It presumes that its sales would be lesser than sales of two first models. Its obvious if to compare the prices of these phones.

New models will be available in the end of summer, most likely in the end of August.

Now few words about positioning of these models and their promotion. Similarity of these phones is clear. A52 and A55 are twines but they will have different price due to marketing. So, A52 will decrease sales of A55. What about M55 and C60? Will the new model with new design and external camera be demanded if the other phone with the same technological features and lesser price is available on the market? Its a controversial question. There is a competion between models inside the line. The company decreases live cycle of launched products and prolonged life cycle of the platform.

Few words about focus, which Siemens extrapolates to Eastern Europe. Remember areas of users interests described above? Firstly, SMS messages, then, polyphonic ringtones and then design. All latest models of different manufacturers are equipped with polyphonic ringtones and give a possibility to send SMS-message. It is said about SMS/MMS messaging but MMS messages are not so popular in Eastern Europe. It is just a toy now, not a real necessity.

So, the company emphasis on design and then on other capabilities. If to take into account logic of users, C60 with an external camera wont be popular, because a camera is not really demanded by a user, especially external one. The same situation is with MC60. Marketing of Siemens doesnt connect different data and concentrated on the longer life cycle of the platform. Once in several month well be able to see new models with old functions and new design. Probably firstly MC60 will be renewed.

New models can provide stable sales only in its segments. Most likely market share of the company will decrease if the situation with the product line doesnt change. It is an urgent question in Russia, where in short-terms the company loses its position.

Eldar Murtazin (eldar@mobile-review.com)
Translated by Maria Sennikova(maria@mobile-review.com)

Published — 03 July 2003

Have something to add?! Write us... eldar@mobile-review.com



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