Siemens, the German technology group, today declined to comment on a report that it is in talks with Motorola, the US mobile phone giant, about a joint venture in wireless infrastructure or mobile handsets.
The Wall Street Journal said the two were holding talks to create a joint venture for either their wireless infrastructure business or handset operations that would be worth between $20bn (£13.56bn) and $25bn.
Though the talks between Motorola and Siemens of Germany have been going on since the start of the summer, they were still at a delicate stage and could fall apart, the paper reported. Siemens said: "We do not comment on market speculation."
The report of joint venture talks between the two companies comes against an abrupt slowdown in the mobile phone business. Philips Electronics has cut back its unprofitable handset division, while Sony and Ericsson have joined forces to create a joint venture to produce mobile phones.
Siemens already cooperates with Japan's Toshiba in developing new generation mobile handsets and there has been speculation that the two companies could be interested in a wider alliance. Siemens is looking closely at its mobile operations and is considering alliances with a number of the world's biggest manufacturers.
A joint venture with Motorola, the world's second biggest handset maker, would open up the potentially vast US market to Siemens but it would have to overcome several hurdles, including brand positioning and differing technical standards.
The world's leading handset makers have been hit by a sharp slowdown in growth of demand for mobile handsets amid increasing scepticism about the near-term prospects of new generation mobile internet services, such as video and music.
Rudi Lamprecht, the head of Siemens' mobile phone division, indicated earlier this year that the German group was looking for opportunities as the sector consolidates. Siemens mobile phone operations made an underlying loss of $467.1m in the third quarter to the end of June, largely due to losses in the mobile handset business and the costs of writing off the value of unsold inventory.
Motorola, the world's number two mobile phone maker behind Nokia, said last month that third quarter sales would be flat with the second quarter, the latest in a string of sales warnings. It has also announced plans to shed 32,000 jobs in recent months, cutting its workforce by a fifth since the end of last year.
