Motorola, Siemens deal rumored

The Chicago Tribune reports on rumors from Germany that "Motorola is talking with Siemens AG about buying the Munich-based firm's wireless equipment operations." Given the company's network division dragging down profits, a possible deal amkes sense.

Ben Bollin at FTN Midwest Securities said, "This whole [wireless equipment] industry is going to have to consolidate. Their customers have done it and those customers have more buying power."

Brian Modoff at Deutsche Bank Securities remarked, Motorola "is in a situation with infrastructure where they are too small to matter for the industry. If you combine [Motorola's equipment business] with Siemens, all of a sudden it looks a lot more substantial."

Mike Walkley at Piper Jaffray thought "a Motorola acquisition of Siemens' wireless business would be a good strategic fit." He said, "This is one that would make a lot of sense in terms o
Bboth Walkley and Modoff noted that "Siemens has grabbed decent market share in "W-CDMA," a new wireless technology that will become more important in the next few years," while "Motorola has not done well so far in the W-CDMA market."

Argus Research analyst Jim Kelleher also believed Tellabs might be a good target for Motorola. He pointed out "it has made strides in next-generation phone networks keyed to Internet technology, and would be an ideal acquisition candidate for Motorola."