German electronics giant Siemens could pull out of mobile phones in January, though a spokesman denied a news report that the company has already decided to sell its phones business to a Chinese company.

The Sunday edition of German business newspaper Frankfurter Allgemeine Zeitung reported that Siemens is to sell its mobile phone business to China's Ningbo Bird, a company which already has a distribution agreement with Siemens in China.

A Siemens spokesman denied this report, but said Siemens could decide on the future of its mobile phone manufacturing division as early as next month. "We are waiting for all the units within our newly merged communications group to submit budgets before we make a decision," the spokesman said. "This process should be finished by the end of January."

"We have not made any decisions yet," the spokesman said. "We have a few options: we can cooperate with another company, restructure the mobile phone business or sell it." A spokesman for Ningbo Bird declined to comment.

Siemens' mobile phone business posted a loss of 141 million euros (£97 million) in the quarter that ended 30 September. The company attributed the loss to competition from lower-priced handsets and quality problems that delayed the rollout of the company's new 65 series of smartphones, which include Blackberry software.

At the launch of the SK65 in August, Siemens said its phone division was here to stay. However, in a laboratory test, Siemens researchers discovered that when batteries in this series ran down during a call, the disconnection warning tune could possibly play extremely loudly, causing hearing damage. The company has since corrected the problem.

Paul Kallender contributed to this article.