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Siemens plans handset onslaught in U.S.

The equipment maker plans to flood the U.S. market next month with its own cell phones and a $25 million advertising campaign.

Equipment maker Siemens plans to flood the U.S. market for the first time next month with its own cell phones, a $25 million advertising campaign, and a goal to overtake Motorola as the world's No. 3 handset maker, Siemens executives announced Wednesday.

Siemens is no stranger to the United States. The German conglomerate, which also sells network supplies and medical equipment, does about $16 billion in business in the United States every year. But it has never sold a cell phone in North America. Despite that, it ranks as having the fourth-highest market share among cell phone makers. Motorola is ranked third.

Now Siemens has set it sights on the United States, with a two-pronged attack that the company hopes will add about $9 billion in cell phone sales to its coffers.

"The United States has become our highest priority," Siemens Chief Executive Graham Paxton told a gathering Wednesday at the Cellular Telecommunications and Internet Association trade show in Las Vegas.

Next month, Siemens will introduce a cell phone that retails for $40. Cingular Wireless has already signed a memorandum of understanding to offer the phone to its customers.

Siemens will follow that initial effort with a $250 handset that can work on both TDMA and GSM, which are the acronyms for a set of standards capable of delivering the high data rates associated with 3G, or third-generation, phones.

GSM and TDMA are considered European technology standards, while North America uses a different standard, called CDMA. But last month, AT&T announced it would be building a GSM network on top of its existing TDMA infrastructure.

A Motorola spokeswoman declined to comment on Siemens' plans.

But Yankee Group analyst Keith Millinson pointed out that the Siemens' phones may have an uphill battle because they aren't compatible with CDMA. He also questioned whether a $25 million marketing campaign focusing on Siemens and not a carrier will be successful in North America.

"A brand campaign may have worked well in Europe, but in North America carriers have a lot more influence on the way phones are marketed," Millinson said.