Further, the possible sale of all or part of Siemens' interest in the business unit may be tainted by an ongoing criminal investigation into fraud allegations involving several Siemens employees in Germany, those analysts said last week. The employees allegedly skimmed more than US$250 million from Siemens to give to companies outside Germany so they would buy Siemens communication products, according to a Siemens spokesman and German newspaper accounts.

"The Siemens product is good, but any buyer should use savvy, since the future of Siemens is so shaky," said Nora Freedman, an analyst at IDC. "It smells."

Munich-based Siemens AG, the parent company of Siemens Communications, issued a statement Nov. 17 saying it is cooperating with German investigators and has begun an internal audit of its subsidiary's financial compliance system. Siemens spokesman Andreas Schwab said that as many as 10 former and current Siemens communications workers and two outsiders are alleged to have siphoned off at least $26 million.

About 200 investigators searched 30 Siemens locations in Munich and Erlangen on Nov. 15 under the direction of the Munich Department of Public Prosecution, he said. Investigators conducted the searches after receiving a detailed anonymous complaint in 2005.

Even though analysts said buyers should scrutinize the Siemens business as much as the new OpenStage phone technology, two IT managers said they are planning to test or deploy the phones when they begin shipping in January. Pricing starts at $295 for the low-end phones. Pricing for the others was not released.