“HP Siemens Bankruptcy: Analyzing the Rise and Fall of a Mobile Phone Giant”

Jakarta –

HP Siemens once a dream, including in Indonesia, around the 2000s. They were able to give resistance to Nokia or Motorola, which at that time were the rulers of the world’s mobile phones. But in the end, HP Siemens suffered bankruptcy.

In 2000, the then CEO of Siemens, Heinrich von Pierer, issued an aggressive statement. “We will take over the world of mobile phones. We believe that we will be able to seize the leading position of Nokia, Motorola and Ericsson,” he said at the time.

In 2000, Siemens had a market share of 8.6%, only losing to Ericsson, Motorola and Nokia. In 2003, their position was stable with a market share of 8.5% globally. But in 2004, began to see a decline. Market share so 7.2% and started to swallow big losses. Even in the first quarter of 2005, their market share was only 5.6%.

At the time, analysts and industry experts were baffled by the rapid decline in HP Siemens’ business. “In fact, Siemens really did nothing wrong,” said Roland Pitz, analyst at HypoVereinsbank.

A German Nokia executive believes Siemens’ collapse may have been a combination of accident, arrogance, miscalculation and negligence. First, Siemens is considered not good enough to work on markets outside Europe. In the United States and the Asian region, they are considered suboptimal. Later, Siemens realized too late the market changes where the life of a cell phone was getting shorter and other manufacturers competed to produce new products.

Samsung and Nokia at that time launched up to 80 new models a year to the global market, while launching new HP Siemens can’t match it. There are still many obsolete cellphones being sold to the market.

On the other hand, HP has also started to become a fashion accessory. Siemens was quick enough to jump on the trend, creating the Xelibri phone that sells in boutiques like jewelry. But the attempt failed. These luxury devices offer too little comfort for the casual user, while wealthier consumers balk due to their plastic build.

Siemens has also been slow to innovate. For example in camera phones, Siemens has opted for external plug-in cameras, while competitors have integrated cameras into phones. “Basically, Siemens failed to anticipate the growing trends in this business,” said Theo Kitz, analyst at Merck Finck.

“These are constantly late with crucial innovations and it really hurts them in the end,” he said at the time, as quoted detikINET from the New York Times, Tuesday (9/5/2023).

In 2005, the HP division Siemens suffered a loss of USD 530 million. This company was forced to be sold to BenQ, but still not much progress until it finally closed completely.

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(fyk/fay)