Philips Electronics is expected to announce it is to quit its 16 month old consumer communications joint venture with Lucent next Thursday.
The troubled venture, launched amid much fanfare, recently lost its president and chief executive, and announced it would not break-even this year.
The two companies began merging their respective consumer divisions in June 1997 to create a $2.5 billion company. The work proved overwhelming and led to a first half loss for the unit, including a $124 million deficit in the first quarter.
Lucent, which owns 40 per cent of the business, would not comment on press reports of the venture?s demise, but said it is awaiting an announcement from Philips next week. Philips said it would release news to coincide with its results on Thursday.
The venture?s ambition was to grab a sizable chunk of the consumer phone business, but has struggled against entrenched giants Motorola and Nokia. The companies hoped the combination of Lucent?s telecomms expertise with Philips? consumer clout would make the venture a powerful force, but analysts put the Dutch company?s share of the cellular phone market to be barely two per cent.
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