German electronics giant Siemens says costs linked to a technical fault in its new mobile phone handsets are likely to reduce earnings in the final quarter of its business year ending in September.
This week, Siemens revealed that its 65-series mobile phones had a software defect that could lead to audio transmission failures in rare cases.
And if a phone call were cut off because the handset's battery had run out, the disconnection tone could begin to play at a very high volume, possibly leading to hearing damage, Siemens warned.
As a result, mobile phone service providers including Deutsche Telekom's T-Mobile, Vodafone, mmO2 and E-Plus have stopped offering the phones to customers.
Siemens earlier this month said it still hoped to turn around its loss-making mobile phones business in the fourth quarter, but today a spokesman would not comment on whether this target would be reached. Siemens, which runs it business year from October to September, made a loss of €88m on sales of its handsets in the three months to June.
