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Lucent, Philips may end JV
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October 16, 1998: 7:55 a.m. ET
AT&T spin-off expected to disband consumer cellular venture next week
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NEW YORK (CNNfn) - Lucent Technologies Inc. and Philips Electronics N.V. reportedly plan to abandon their joint venture to market cellular telephones to consumers.
The Dutch electronics giant, which owns 60-percent of the entity known as Philips Consumer Communications, plans to make an announcement as early as next week on the fate of the money-losing venture, The Wall Street Journal reported Friday.
Pitted against the likes of Motorola, Ericsson and Nokia in the highly competitive cellular arena, the venture is expected to lose about $500 million this year on sales of $2.5 billion, the paper said.
Lucent, which owns the remaining 40-percent, teamed up with Philips after a gradual erosion of its market share to international competitors. But since then, the Murray Hill, N.J.-based AT&T spin-off has backed away from its consumer-related businesses.
It was uncertain what would become of the venture's assets. Philips could buyout its American partner, seek a different partner or dismantle the assets altogether.
Company officials declined to comment on the report.
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