Siemens 2006 Annual Report Download - page 9

Letter to our Shareholders 9
■The decision to put our telecommunications carrier business into a 50-50 joint venture with
Nokia was not easy. After weighing all the options, however, this seemed to be the best way to
remain a leading supplier of telecommunications infrastructure given the dramatic changes
now taking place in the world market. Size is a critical factor for manufacturers and providers of
telecommunications solutions and services. This new joint venture will give us the critical mass
and financial clout we need in order to compete successfully. We’re convinced that Nokia Siemens
Networks has excellent prospects of becoming a global leader in its market. Steps to complete
the integration and start operation in the second quarter of fiscal 2007 are underway.
In addition to these major portfolio moves, we made a number of smaller acquisitions that will
further strengthen our position in the industrial automation and power markets. Our restructuring
measures – including all acquisitions, divestments and joint ventures – affected some 30 percent
of our businesses in fiscal 2006. We’re pleased to have successfully completed this formidable task.
We’re deeply concerned about developments at our former mobile phone business, now part of
the Taiwanese company BenQ. In September 2006, the company filed for bankruptcy for its mobile
phone business in Germany and other countries, causing a public outcry in Germany in particular.
The filing took us by surprise, above all, because we were convinced we had chosen a good part-
ner for our mobile phone business and because we had purposely strengthened BenQ’s position
by providing financing and by transferring patent and brand rights. We’ve now launched avariety
of measures to facilitate job placement for our former employees.