Philips considers selling mobile phone arm

Company doesn't fancy its chances of achieving sales targets under current economic conditions for mobile makers

Dutch consumer electronics company Philips could be poised to withdraw from the mobile handset market, after admitting that it was unlikely to achieve its sales targets in 2001.

Speaking after Philips' annual shareholder meeting on Thursday, incoming chief executive Gerard Kleisterlee said that the company's mobile handset division was one of several under-performing units whose future was under consideration. Kleisterlee told journalists that Philips would listen to any attractive offers for the mobile phone division.

After making a loss of £33m in 1999, the mobile handset division -- Philips Consumer Communication -- managed to make a slight profit last year. However, it only sold 13.5 million handsets compared to a target of 18 million. However, the slowdown in growth in the mobile sector means that the company has already admitted that it is unlikely to achieve its sales target of 20 million handsets this year.

Last year's sales made Philips the ninth largest phone maker. Earlier this year Ericsson, ranked number three behind Motorola and market leader Nokia, announced that it was going to stop manufacturing mobiles. All the major players in the mobile sector have admitted that worldwide sales of mobiles will be lower than previously thought. Analysts believe that total mobile sales in 2001 will be around 500 million units.

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