Innovating the Mobile World – It‘s all about execution Siemens Information and Communication Mobile
Financial Market Days, May 13th, 2003 ICM - business areas
Siemens mobile
End-to-end (E2E)
Networks Solutions Mobile Cordless Wireless Phones Products Modules
May 2003 Information and Communication Mobile 2 ICM - growing above the market
Mobile Infrastructure CY2002 Mobile Handsets CY2002
11
22 Value Units 33Siemens 12%
4 Siemens 8.2%
No. 3 position with 12% No. 4 position with 8.2% market share market share Market growth (yoy) -24% Market growth (yoy) +6% Our growth (yoy) -10% Our growth (yoy) +16%
May 2003 Information and Communication Mobile 3 ICM - performing in a difficult market
Group Sales in Restructuring Fitness profit billions of euros Program margin 12 11.299 11.045 11%
8.910 9%
8 6.5%*) 8.1% 7% 5.185 5.138*) 5%
4 2.2% 3% 0.9% 1% 0 0% 1999 20002001 2002 1H2003
(2.7%) *) comparable May 2003 Information and Communication Mobile 4 ICM - key financial data 2Q03 and 1H03
Group Group Sales profit Net cash profit margin in millions of euros
2Q03 2,329 55 2.4% 279
Change yoy (15%) 25%
1H03 5,185 114 2.2% 167
Change yoy (11%) 41%
May 2003 Information and Communication Mobile 5 ICM - vendor financing
in billions of euros
2.0 1.6 1.3 1.5 0.3 22% 0 1.1 0 1.0 0.6 78% 0.7 52% 0.6 58% 0.5 0.7 0.6 48% 0.5 42% 0 31.03.2002 31.12.2002 31.03.2003
Commitments under negotiation UMTS Approved commitments not utilized GSM/GPRS Approved commitments utilized May 2003 Information and Communication Mobile 6 Siemens - reliable partner
AAA AA+ AA AA- AA- Siemens A+ A A Competitor A
BBB+ Investment Grade Investment BBB BBB Competitor B BBB- BB+ BB BB Competitor C BB- B+ B+ Competitor D B B Competitor E B- B- Competitor F CCC Speculative Grade CC SD/D MayMai JulJunSep JulNov AugJan MarSepMay OktJul SepNovNovDezJan JanMar MayFeb JulMrSep z AprNov JanMaiMarJun Jul Aug Sep Okt Nov Dez Jan Feb Mr z Apr Mai Jun Jul Aug Sep Okt Nov Dec Jan Feb Mr z 0000 00 0000 0000 0100 01 0001 0001 0100 010002 0102 0201 02 0102 0102 0301 03 01 01 01 01 01 01 01 02 02 02 02 02 02 02 02 02 02 02 02 03 03 03
Source: S&P Long Term Credit Rating May 2003 Information and Communication Mobile 7 ICM - pursuing Mission 2004
11 Increase market share
22 Demonstrate leadership
Become the end-to- 33 end solution provider 8-11% Improve employee Group 44 satisfaction profit Generate positive 55 group profit + net cash
2.2% 0.9%
(2.7%)
1H Mission Business target agreements 2001 2002 2003 2004 per employee 2004
May 2003 Information and Communication Mobile 8 ICM - it‘s all about execution
Mission 2004 Powered by top+
Networks Solutions Mobile Cordless Wireless Phones Products Modules S Top+ C3 Program WM Top+ Program Traction
Governance & Commercial Overhead cost Knowledge IT Entrepren. reduction Initiative Roadmap Projects Enforcement
High Impact + Supply Chain Balanced Project Customer + Projects (HIP) Cash Management Scorecard for ICM
Regional Economic US Business China Business Initiatives Excellence Award Initiative Initiative
Strategic Initiative: Other End-to-end Top+ Q Initiatives Solutions
May 2003 Information and Communication Mobile 9 ICM Networks
Becoming the architect 1 of tomorrows’ networks! 2 3
Position: No. 3 worldwide Over 180 customers in more than 90 countries 20 UMTS contracts
Objectives: No. 2 player in mobile infrastructure Expand global footprint in the Americas, China and Eastern Europe Leading provider of end-to-end solutions Aggressive product cost roadmap
Differentiator: Leading technology supplier for UMTS, EDGE, payment Global reach, proven reliability May 2003 Information and Communication Mobile 10 ICM Networks - flashback FMD 2002
Leverage Siemens global reach Grow above the market
Customer value & product portfolio Aiming for the no. 2 position Operational excellence
Improve profitability Adjustment of costs
May 2003 Information and Communication Mobile 11 ICM Networks - market, sales and market share
in billions of euros 57 59 60.0 46 50.0 45 Market 40.0
5.8 6.0 5.2 Sales 5.0 4.2 4.0 3.0 3.0
2.0
1.0 Market 6.5% 7.4% 9.8% 12% Share CY1999 CY2000 CY2001 CY2002 Sources: Company reports, Siemens estimates May 2003 Information and Communication Mobile 12 ICM Networks - the UMTS opportunities for growing our market share
Siemens 2G/3G radio share UK 2G 0% Three 3G 50%
Italy 2G 0% Tre 3G 60%
Austria 2G 0% Drei 3G 100%
Germany 2G 0% T-Mobile 3G 70%
Germany 2G 25% VodafoneD2 3G 50%
France 2G 0% Cegetel 3G 50%
May 2003 Information and Communication Mobile 13 ICM Networks - a 3G outlook
W-CDMA 10-15% of the industry in 2003 Mass market expected for 2004
EDGE Continuous roll-out Successful implementation in the US (Cingular)
TD-SCDMA Spectrum allocated in China Network trials in 3 cities running
May 2003 Information and Communication Mobile 14 ICM Networks - GSM is leading
GSM 454 GSM operators Accumulated worldwide subscriber base 792 million GSM in 182 countries
GSM fastest growing technology in the Americas
CDMA Accumulated 165 million subscriber base new subscribers 146 million in 2002 YE2002 YE2002
May 2003 Source: EMC April 2003, CDMA Association Information and Communication Mobile 15 ICM Networks - regional aspects
Our UMTS technology covers all major European countries
~ 20% ICM N market ~ 10% ICM N share in market share China across all 8 new orders in standards in 1Q03 in Africa Latin America
May 2003 Information and Communication Mobile 16 ICM Mobile Phones
Setting trends in the mobile industry! 1 2 3
Position: No. 2 in Europe No. 4 worldwide
Objectives: Continue successful entry in the Americas Counter-attack in Asia-Pacific Innovate with meaningful technology & design Emotionalize the brand further Build the fashion phone category (XelibriTM)
Differentiator: Design leadership, product quality, strong operator relationships
May 2003 Information and Communication Mobile 17 ICM Mobile Phones - flashback FMD 2002
Rapid renewal of product range
Strengthen brand to Grow above support aspirations the market Expand global presence
Focus on Reduce time-to market three key through technology Secure platform standardization challenges productivity Productivity - program
Improve cost position of products and channels Improve ASP Increase share of high-margin products/ applications May 2003 Information and Communication Mobile 18 ICM Mobile Phones - market, sales and market share
Million units sell-through 500 423 450 413 400 Market 400 350 284 300 Million units in billions of euros 35 30 sell-through 27 5.0 Sales 4.0 4.2 4.2 4.3 3.0 13 2.0 2.0 Market 4.6% 6.5% 7.4% 8.2% Share CY1999 CY2000 CY2001 CY2002 May 2003 Source: Gartner Dataquest Information and Communication Mobile 19 ICM Mobile Phones - market evolution one size does not fit all any more
Design is a key element
Technology
Fashion & Lifestyle
May 2003 Information and Communication Mobile 20 ICM Mobile Phones - new products 2003
May 2003 Information and Communication Mobile 21 Xelibri - a fashion accessory that makes phone calls
May 2003 Information and Communication Mobile 22 ICM Mobile Phones - regional aspects
Full-line No. 1 position in Russia supplier for market share of ~ 30% the US market
~ 8% market share in China
No. 1 position in Brazil with > 60% market share
May 2003 Information and Communication Mobile 23 ICM E2E - flashback FMD 2002
Best in class portfolio with leading partners Gain market share A&C package integration, development, Facilitate maintenance, and the ICM E2E hosting applications
offering First Mover regions Europe/Asia
Focus
Seven solution segments
May 2003 Information and Communication Mobile 24 ICM - making significant progress in E2E
First sales successes: AIS Thailand, Vodafone Portugal, OI Brazil
Prepare the market with commercial lead projects
Market launch: five ready- to-sell reference solutions at Cannes 3GSM Congress Messaging Five cross-divisional business focus teams Entertainment Payment Location/Presence Announcement Multimedia Services over IP July 2002 October 2002 February 2003 April 2003 May 2003 Information and Communication Mobile 25 ICM - ready-to-sell live E2E in Cannes
Professional Kids & Fun 22 33 Tracking & Machine-to- Different Solutions Navigation Machine Business & Services target Community Solutions Solutions Mobility 44 groups 11 & Messaging Solutions Solutions 55 Tailored A55, C55, U10, C55, S55 SX 56 device S55, SX 56 PocketLoox TC45 Java segment Java SIP Multiple Client Device Push- Java IMSFan Portal, VIP Assistant VendingJava to- MMS- VIP Assistant, “TrackMultiple & Trust” Appli- Download Album, Machine Talk, Mobile Office in-car/offDevice Wireless Gaming Voice- Control & cations Download Chat, MMS, Travel Applicationcar navigation Module Ring Tones Photo Map Server IM Command MSP Charge@once SMS StreamingVideo Download Push-to-TalkOMIP Location TelephonyContent
Server, Hosting IMS Management Wireless Gaming, (incl. UMTS Wireless
Geotoolbox Integration Enabling Pre- Pre- Module MSP, Location, LES ModulePayment services Payment sence sence) Application Charge@once Pay- Payment OMIP Premium ment OMIP Location SMS MSP Location Architectural Consulting IMSMMSC Charge@once GPRS WLAN Infra- IMS GPRS GSM/GPRS, UMTS, GPRS, structure GSM/GPRS GPS, GPRS GPRS WLAN WLAN solutions Flexible Charging Seamless Inter- M2M of Bearers, Voice over Access national Service E2E Know-How USP Contents GPRS WLAN- Tracking Charging and UMTS Services
May 2003 Information and Communication Mobile 26 ICM - become the leading E2E solution provider
74% of our customers stated 33 that end-to-end solutions are 22 important part of a suppliers’ portfolio offering Source: 56 MNO interviews
44 11 55
“the only one who has it live” “real user driven solutions” “most convincing performance” “business now instead of over-hyped technology promotion”
May 2003 Information and Communication Mobile 27 ICM - E2E sales example
Customer: AIS Thailand
Project: TV on mobile - Real-time video streaming over GPRS
Split of responsibilities: AIS: GPRS network operator Shinee.com: User interface creation, content management ITV: Content and service provider Siemens: End-to-end solution provider (video streaming solution, GPRS network, handset clients), system integrator, matchmaker between the parties involved
ICM USP: chosen as supplier of a full-scale E2E video streaming solution, service enhancements planned May 2003 Information and Communication Mobile 28 ICM E2E - fixed & mobile convergence
Fixed line Home messaging Global Management Communication Network
Gigaset
May 2003 Information and Communication Mobile 29 ICM E2E - WLAN and UMTS integration
Highly mobile
Handover Roaming Degree of UMTS Security mobility Billing
WLAN
Nomadic use Medium High Bandwidth
May 2003 Information and Communication Mobile 30 ICM - our commitment for Operation 2003
11 Increase market share
Demonstrate 22 leadership Become the end-to- 33 ut end solution provider o n b o i Improve employee a t l 44 l u satisfaction a c ‘s Generate positive t xe 55 I e group profit + net cash 2.2% 0.9%
(2.7%)
1H Mission Business target agreements 2001 2002 2003 2004 per employee
May 2003 Information and Communication Mobile 31 Siemens Investor Relations Team
Marcus Desimoni +49-89-636-32445 Eckhard von Münchow +49-89-636-33173 Christina Schmöe +49-89-636-32677 Andreas Schwab +49-89-636-36165 Claudia Wagner +49-89-636-33693
Webpage: http://www.siemens.com Investor Relations e-mail: [email protected] Fax: +49-89-636-3283