Toshiba breaks off 3G partnership with Siemens

And now we know why

Updated Toshiba has ended its partnership with Siemens to build 3G phones, blaming delays in European networks and poor prospects for the next-generation service.

News of the break-up first surfaced on the Web site of German newspaper Handelsblatt, where it quoted a Toshiba spokesman saying the joint research group "is not progressing as originally planned". It initially denied the partnership had been cancelled, but subsequently confirm the split, saying "considering the profitability of the business and its prospects, we felt that it's not feasible."

The partnership was formed in November 2000, where Toshiba hailed it as a "long-term alliance to drive development of third generation mobile phones". The two companies would combine resources and R&D "to ensure the availability of 3G terminals in early 2002". Analysts praised the deal.

However, with every European operator now saying 3G will appear at the end of 2002 at the very earliest, Toshiba has decided to duck out, leaving Siemens to shoulder the development costs.

The two companies were concentrating on W-CDMA (Wideband Code Division Multiple Access) technology handsets for Europe and Asia to aid in migration from GSM phones to the 3G standard UMTS. It also planned to work on future 3G phones like MPEG-4 handsets. So far though W-CDMA has only been used by NTT DoCoMo in Japan and something called CDMA 2000 RTT-1 used (extensively) in Korea. European operators are increasingly looking at GPRS phones as a stop gap.

"This was never a joint venture," a Siemens spokeswoman has said. Semantics.

Update

Thanks to vulture-eyed readers Bert Kenward and Adam Tibbalds, we believe we may have found the reason behind Toshiba's decision. Could it perhaps have anything to do with a deal, also announced today, in which Toshiba has signed up with TTP Communications "for the development of dual-mode 3G/GSM baseband chipsets for wireless terminals"?

It would seem: "the dual-mode chipsets will enable terminals to be used on both GSM and 3G wireless networks". Of course "the deal combines TTPCom's 3G/GSM dual-mode technology with Toshiba's existing 3G technology developed for the rapidly growing Japanese market, where the world's first 3G (W-CDMA) network has recently been launched."

This has had the rather advantageous effect of boosting TTP's share price by 5.5 per cent. ®

Related Links

Initial announcement of partnership
Handelsblatt story