Siemens AG, Berlin and Munich, is making preparations to reorganize its operating units in the information and communications segments (I&C). The move, slated to take effect on October 1, 1998, has been spurred by basic changes in global markets - above all, technological convergence, telecoms deregulation and privatization, the increasing importance of services in I&C, and customer demand for integrated I&C solutions. To play an active role in shaping these changes and to exploit the opportunities they offer, the three Siemens operating units - Public Communication Networks ("ON), Private Communication Systems (PN), and Siemens Nixdorf Infomationssysteme AG (SNI) - are being integrated into three new Groups. The `I&C Services` Group will offer new services like consulting, operation and I&C solutions for all customer segments. The `I&C Networks` Group will provide end-to-end solutions for voice and data networks. The `I&C Products` Group will develop and market globally competitive high-volume products. This reorganization will enable Siemens to set global standards for solutions and product quality in the information and communications sector. Dr. Heinrich v. Pierer, President and CEO of Siemens AG: "Siemens is the only company in the world that has all I&C competencies under one roof. This new organization will allow us to achieve our goal to be number one for customer satisfaction in this fantastically dynamic field." The traditional splits between data technologies and communications technologies and between public networks and private networks are becoming increasingly untenable. A convergence of technologies is taking place in all I&C sectors. The growing tendency toward open platforms is producing a clear separation between the process-driven solutions and the technology-driven systems businesses. With sales of nearly DM50 billion, I&C segments will account for roughly 40% of Siemens` total sales in the current fiscal year. The reorganization now underway represents yet a further step in the integration of activities that has been taking place in recent years within the individual Groups and sales units. * SNI`s Solutions and Business Services unit (SBS) will form the core of the new `I&C Services` Group. Last year, SNI consolidated its process-driven solutions activities and its service business in the SBS unit. SBS will be expanded to include businesses now within the communications Groups as well as new services like outsourcing and network engineering. The `I&C Services` Group will continue to be run as a legally separate Siemens company. The Group`s business volume today is roughly DM8 billion. * The new `I&C Networks` Group will comprise most of the current Public Communication Networks Group ("ON), the communication solutions business for corporate networks currently within the Private Communications Systems Group (PN), PN and SNI`s networks businesses and the respective service activities. Today`s business volume: roughly DM23 billion. * The `I&C Products` Group will chiefly comprise PN and SNI`s terminal equipment businesses and their respective service activities. Today`s business volume: roughly DM19 billion. To strengthen the personal computer division, a memorandum of understanding for a joint venture has just been signed with the Acer Group of Taiwan, a world leader in the business. Gerhard Schulmeyer, President and CEO of SNI: "These steps are part of our strategy to integrate the lion`s share of SNI into Siemens AG already planned. Siemens is the first company to merge its data technology and communications technology activities, making it a pioneer in this respect. The separate legal unit Siemens Nixdorf Informationssysteme AG will continue to be responsible for the retail systems and self-service products businesses." A taskforce will work out the details of the reorganization within the next few weeks. They will be finalized by a group headed by Dr. Heinrich v. Pierer. Gerhard Schulmeyer paved the way for the planned integration of I&C activities through the structural changes he initiated at SNI. Effective October 1, 1998, Schulmeyer will assist the implementation of I&C integration. At the end of the year, he will become President and CEO of Siemens Corporation, New York, to replace Albert Hoser who is retiring. Siemens` U.S. sales are higher than in any other country except Germany. They will total more than DM18 billion in the current fiscal year and will continue to grow in the future thanks in large measure to the takeover of Westinghouse`s conventional power generation business now underway. Dr. Volker Jung, member of the Siemens Managing Board with special responsibility for the Groups in the communications (future I&C) and semiconductor segments, commented: "All Groups have carefully prepared for the reorganization - a move which signals Siemens` commitment to win a top competitive position in the world information and communications technology market. It is a basis on which our customers and employees can build."
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