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Siemens makes plans to build 33 million handsets
Posted: 04-Aug-2000 [Source: Siemens press release]

[Siemens has cut a deal with Flextronics to outsource the manufacture of 33 million handsets over a period of three years. Other production facilities are also ramping up capacity.]

Munich -- Flextronics International Ltd. and Siemens Information and Mobile Communications Group today jointly announced the signing of an agreement in which Flextronics will manufacture approximately 33 million mobile telephones for the Siemens by the end of calendar year 2003. The outsourcing agreement supports Siemens Information and Communication Mobile Group's goal to rank in the top three mobile telephone manufacturers in the world. Simultaneously, Siemens will increase production capacity in its Kamp-Lintfort, Bocholt and Leipzig facilities. The Siemens plant in Shanghai, China, will also double its capacity, increasing production from 5 million units to 10 million.

"By outsourcing a portion of our cell phone production, we can react more quickly to market conditions and get our products to market with greater speed. In addition, we can decrease the amount of capital we spend for production and thereby lower our overall capital expenditures," comments Rudi Lamprecht, President of Siemens Information and Communication Mobile. "We are continually sold out of mobile phones, and this agreement with Flextronics allows us to satisfy the enormous demand."

"We are a leader in terms of production expertise. It is essential to keep this knowledge within our company. At the same time, outsourcing the production of phones will increase over the long term and the partnership with Flextronics supports us in meeting that goal", says Lamprecht.

"This order confirms Flextronics is a natural choice when one of the world leaders in the communications sector decides to outsource high volume production," says Ronny Nilsson, President of Flextronics International, Western Europe. "We have the capacity, competence and experience to partner with world leaders, such as Siemens, within the mobile phone, infrastructure product, computer, networking and other fast growing sectors within the electronics industry. Furthermore, this deal strengthens our partnership with Siemens even more," continues Nilsson.

The partnership between Siemens and Flextronics has already proven successful. Last year, Flextronics acquired Siemens server production from Fujitsu Siemens in Paderborn, Germany. When Siemens Information and Communication Mobile purchased the mobile phone unit of Bosch this spring, Flextronics took over the Bosch mobile phone production site in Pandrup, Denmark.


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