Lucent and Philips in acrimonious split over mobile phones

NEWS Lucent technologies and Philips Electronics have abandoned plans for a joint venture to supply the global market with mobile phones. The move signals an end to Philips' plans to make inroads into the US mobile phone market using CDMA technology. The venture - called Philip Consumer Communications (PCC) - has been fraught with problems from its launch. Lucent said it was unhappy with the way it was managed. A spokeswoman for Lucent confirmed: "There was a significant turnover of management and a number of missed opportunities in the market which became too great for the company to cope with." Philips said the missed opportunities came about as a result of technical difficulties with the CDMA chipset, making it impossible for the company to meet its deadlines. Elaine Axby, analyst at Schema consultancy, said: "I'm not sure how well it was going to work in the first place. Lucent was never very strong in the handset market, so it wasn't really an ideal match." She added: "This signals the end of its [Philips'] ambitions for second generation CDMA, which is the dominant technology in the US. It could still supply to the few operators in the US who use GSM though." The electronics group said it now plans to concentrate on its GSM technology, value added services for that technology such as Internet and video, and the development of third generation UMTS technology. Axby agreed this is the best strategy for Philips. "It must strengthen its position in Europe and strengthen its position with GSM and third generation technology. Philips should also be looking at consumer branding, particularly with services such as Internet access on the GSM handset," she said.