This
autumn, Siemens will unveil its latest weapon in
the battle against a sluggish global economy,
where spending on luxury items is typically the
first casualty.
The German giant – Europe's largest technology
group – plans to unleash a hybrid telephone unit
in the UAE as part of broader plans to tap into
the bulging consumer purses in the Middle East
and emerging markets.
The firm's Home and Office Communication Devices
division (known as SHC), best known for its
Gigaset landline phones, wants 50 per cent
market share of the Middle East's premium
technology sector by 2011 and plans to sell more
than 10,000 of the iPod-compatible devices in
the first year following October's launch.
Jochen Eickholt, Global CEO for Siemens SHC,
said the iPod telephone-docking station was in
response to demand for converging technologies,
where more functions are expected from one
access point. He said Siemens SHC, which
generates Dh4.6 billion and sells up to 17
million phones a year, made a conscious decision
to target the Middle East at a time when Western
economies were struggling and the Siemens group
has been forced into brutal staffing cut backs.
Eickholt said the 16,750 redundancies announced
earlier this month will have "zero impact" on
his division, which was braced for 50 per cent
year-on-year growth in the UAE alone. Designs of
the iPod telephone unit were a closely guarded
secret, but Siemens expected the devices to
retail at up to Dh1,750, with upwards of 100,000
flying off the shelves worldwide in its debut
year.
What new products are you launching in the
Middle East?
We are going to offer more convergence devices,
including an iPod docking station with
hands-free calling. So you have the convergence
of telephony in its classical sense together
with iPods or other devices. If you're listening
to music and a call comes in, instead of having
to pick up the phone you just push a button and
the music lowers and you can accept the call.
This will be launched in the Middle East in
October and will cost between Dh1,160 and
Dh1,750.
It's attractive because it directly targets the
needs of the end consumer together with new
technological developments. The iPod docking
station is attractive and superior to what we're
seeing elsewhere in the market and the price
point will be extremely tempting. It's taken us
little more than a year to develop the
technology for this device at a cost of
millions. There is also a trend towards fewer
devices in the home but more and more
application and functions. So that leads to a
combination of devices in one box.
We are working towards having facilities such as
telephone, iPod and e-mail all-in-one products.
How many of these iPod combination units are you
expecting to sell in its first year?
Globally, we'd look to sell about 100,000 in
year one with the Middle East making up 10 per
cent of this.
What are your best-selling products in the
Middle East?
The best known products are our Gigaset
telephony devices, in particular the Gigaset
AL145, which we sell tens of thousands here.
They are also all eco-mode, which means you have
reduced power consumption and radiation.
Globally, we sell between 15 million and 17
million every year, and in the Middle East the
figure is more than 100,000 but our target is
clearly to go into the millions.
We have more than 20 models on sale in the
Middle East. And by using our products you will
reduce your energy consumption by at least half
and lower CO2 emissions by 500,000.
How does Siemens SHC fit into the global
electronics firm?
My division represented last year about Dh4.6
billion in revenue and we are approximately
2,100 people and are active in 70 countries. The
overall company is in the range of Dh465bn, so
we are about one per cent of this – Siemens is
an entire world sometimes.
SHC now exceeds 30 per cent market share in the
Middle East. Clearly, we would like to be number
one here and in the next three years it would be
more than realistic to achieve a 50 per cent
market share. Currently, our business in the UAE
is growing at more than 50 per cent a year.
Our competitors include Panasonic and Philips,
and a number of not-so-known brands. In the
broadband arena its Thomson, Netgear and in the
Far East companies like ZTE.
Siemens recently cut 16,750 jobs worldwide to
control costs and combat the global economic
slowdown. How did this affect your division and
your Middle East operation?
There's been zero impact on us. We were not
involved in that action. This activity comes
from the so-called three sectors, industry,
energy and healthcare, and we are not part of
this so there is no corporate target for SHC.
There maybe changes to our staffing levels but
that will be nothing extraordinary and only a
natural adaption to our business model.
Our response to the overall economic situation
is to focus on the end consumer more and the
value proposition. In the UAE we have also
invested and intensified our partnerships with
local retailers. In the US people feel this
economic slowdown but in the UAE we certainly
don't see this. Our intention is to become even
stronger here to make sure it's a bigger portion
of our overall business. Hopefully then some
elements of slowdown can be compensated for by
results from here. While economics are slowing
down elsewhere, the Middle East is our strongest
growing region. There's been a conscious
decision to turn to emerging markets.
PROFILE: Jochen Eickholt, Global CEO, Siemens
SHC
Eickholt has served in his current role as
President and Chief Executive Officer of Siemens
SHC since May 2006. Previously, he was a member
of the Board of BenQ Mobile and in charge of the
BenQ Mobile Product House. Between 2002 and
2005, he was Head of the Supply Chain Management
at Siemens Com and ICM, in charge of marketing
and sales. Prior to this, he held the post of
CEO and Managing Director of Siemens
Elektropristroje Trutnov in the Czech Republic.
This
autumn, Siemens will unveil its latest weapon in
the battle against a sluggish global economy,
where spending on luxury items is typically the
first casualty.
