The loss-making mobile phones unit of German engineering conglomerate Siemens launched its first self-made third-generation mobile phone on Wednesday, the first of two expected this year. The SXG75, with built-in GPS navigation system made by Siemens's VDO division, will go on sale in the third quarter of this year and will retail at 500 to 700 euros ($663 to $928) when not sold with an operator contract discount. Joern Watzke, in charge of bringing new Siemens's UMTS mobile phones to market, said he expected to sell at least 1 million of the phones over the model's lifetime of about a year.
Third-generation phones, which have picture, video and Internet capabilities, have been on the market in Europe for two years. The first models failed to sell in large numbers as they were perceived to be clumsy and their battery life was short. Siemens has previously sold rebranded phones made by rival Motorola.
The SXG75, launched at CeBIT, the world's biggest electronics trade fair, will compete with such models as Motorola's own E1000 multi-media phone and is built on a Qualcomm chipset.
Watzke said he did not expect his marketing budget for the SXG75 - which would normally be at least 10 million euros for a high-end phone - to be cut.
The head of Siemens's telecoms unit said on Tuesday he aimed to save an additional 400 million euros in costs at the mobile phones business this fiscal year to September, a large part of which would come from cuts in its marketing budget. Watzke said Siemens was currently in contract negotiations with all the major operators to sell the SXG75.
He added that the company's second UMTS phone would be launched "in four weeks or so", and would be on the market this calendar year.
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