Apparently for Siemens Mobile Acceleration, the time to jumpstart the U.S. market for innovative mobile solutions is now. Contrary to the regressive trends in Silicon Valley, Siemens sees an opportunity to stimulate the environment for innovative new products serving network operators, enterprises, and individuals.

Based upon recent activities, the only company that shares Siemens' level of enthusiasm for seeding wireless startups in this economy may be Intel Corporation. The Santa Clara, CA, chip kingpin has been funding new wireless companies at a frenetic pace over the last 12 months in a somewhat obvious attempt to support market creation for their complementary technologies, such as Centrino and XScale.

Venture capital firms launched during the peak of the telecom bubble are beginning to disappear, ever so quietly. Established VC firms which doubled and tripled the size of their funds during the late '90s run of irrational exuberance are finding themselves with portfolios full of reinvented, cash-hungry companies. And the landscape has changed considerably since these ventures were first launched. Some funds have gone so far as to return investment capital to their institutional benefactors while they determine which of their offspring are closest to finding customers in a depressed, wartime economy.

More than a few Silicon Valley firms have been reticent in their mobile data and wireless investments of late. So it seems like a less than perfect time to open yet another new office there. Or does it?

Munich-based electronics and engineering giant Siemens AG (NYSE:SI) sees the second quarter of 2003 as an ideal time to spring its early-stage investment concept on North America - even as many of its Fortune 500 contemporaries seek to divest their venture capital portfolios entirely.

Founded in Germany around mid-year 2001, Siemens Mobile Acceleration is a wholly owned subsidiary of the Siemens Information and Communication Mobile Group. Just recently, the organization established its first U.S. presence - in San Jose, CA - to complement the work being done in places as far off as Stockholm, London, Paris, Milan, Dublin, Vienna, Beijing, and Shanghai.

What separates the strategy of new vice president Sven Weber and managing director Gerald Brady from partners at neighboring Silicon Valley firms is their focus on early-stage wireless investments of around $1 million and their concerted effort to drive each startup quickly into the arms of its first customer. That, and the support of their corporate parent back in Munich.

With 426,000 employees in 192 countries and $77.8 billion in worldwide sales last year, Siemens AG counts the United States as its largest market. So perhaps it's no surprise that the group seeks to stake a claim here, just as the new markets for mobile data struggle to define themselves. With a large footprint in the U.S., the Siemens Mobile division itself has over 28,000 employees worldwide.

A New Contender on the Mobile Investment Front
Another departure from traditional venture firms is in the management team's desire to pair each investment director with only two portfolio companies. In this way, the Siemens Mobile Acceleration (SMAC) concept of speeding a young company's development cycle can be applied more readily.

What is expected to happen, explains new vice president Weber, is that the SMAC influence will allow a new company to focus on its product development while leveraging the R&D expertise of the Siemens Information and Communications Mobile Group and the wide reach of its global sales and distribution network. With proper planning, new market-aware products can be introduced to current Siemens customers or even integrated into existing product and service packages.

Once the goal of securing the first customer is achieved and revenue is being generated, the SMAC team will work to assemble investors for the next funding round - perhaps including Siemens Venture Capital (SVC), the corporate venture organization for the entire Siemens group.

Success Stories
Stockholm-based Appload AB was a five-person startup at the time it received funding from the Siemens Mobile Acceleration group this past November. The company's content server product line has caught the attention of several Asian mobile operators and it expects to announce its first customer very soon. Weber says this is proof "that our concept allows a five-man team from Sweden to get traction from large operators in Asia." Appload's technology was also featured in the Siemens booth at both the CeBIT show in Hannover, Germany, and at CTIA Wireless 2003 in New Orleans.

With experience gained from overseas markets, the SMAC team feels that it has the experience to critically assess the challenges facing the wireless data market here, and the ability to introduce promising technologies both at home and abroad. According to Weber, the San Jose office will be keying on deals that range from "the network layer through applications, entertainment, and handset optimization." He says that U.S. entrepreneurs in particular may have a good sense of what enterprise managers will demand of new mobile services in the future.

Dr. Dietrich Ulmer, president and CEO of Siemens Mobile Acceleration at the group's headquarters in Germany, thinks they can replicate their early success in Europe and Asia by acting as "a global gateway for emerging companies" here in America.

Expect the San Jose office to announce its first two U.S. investments in the coming months. The following is a look at their portfolio to date.