German technology conglomerate Siemens is cutting prices for some of its mobile phones to compete with industry leader Nokia, which is battling to win back market share, a spokesman said on Friday.
"We compete with Nokia in low-end, entry-level phones and the mid-range. If they cut their prices of course it has an effect. For selected entry-level products we are also lowering prices," he said.
As part of a two-pronged strategy, Siemens Mobile on Friday also unveiled two new models: one expensive handset with colour display and digital camera and the second a clamshell phone with digital camera aimed at young consumers.
"Of course, it's an issue," Siemens handset chief Thorsten Heins said of Nokia's price cuts. "We can react by lowering prices or with new products."
Siemens says the new phones will be on sale from August and September.
Nokia's share of the global cellphone market fell sharply in the first quarter of 2004, hurt by a lack of new models and rocky relationships with mobile phone service providers, a recent survey found.
According to market research group Gartner, the Finnish firm's market share slid to 28.9 percent from 34.6 percent in the same quarter last year as it lost ground to all of its top six rivals.
Siemens, the world's fourth-biggest cellphone maker, gained less than most, with its market share rising just five percent to eight percent of the global market.
Second-placed Motorola gained 12 percent and had 16.4 percent of the market in the quarter, while number three, Samsung, extended its lead over Siemens, gaining 16 percent to capture a 12.5 percent share.
Heins declined to comment on when Siemens was expected to overtake Samsung, a long declared goal of the German firm.