Siemens creates ultrasound subsidiary with headquarters at Quantum facility

December 4, 1991

Siemens formed a new ultrasound company as a final step in themerger of its existing ultrasound operations with that of QuantumMedical Systems. Siemens Quantum will seek to provide the productand market focus of a dedicated ultrasound vendor, said

Siemens formed a new ultrasound company as a final step in themerger of its existing ultrasound operations with that of QuantumMedical Systems. Siemens Quantum will seek to provide the productand market focus of a dedicated ultrasound vendor, said RichardS. Leard, senior marketing manager. At the same time, the newcompany will attempt to leverage the technical and financial resources--alongwith cross-modality marketing opportunities--of its German parent,he said.

"None of the big (medical imaging) companies have donewell in the ultrasound market," Leard told SCAN. "Full-linecompanies are entranced by MR, CT and other modalities. You haveto be fast in the ultrasound business. You have to respond quicklyand remain close to the customer. It is harder to do that whenyou have a big ship to turn around."

Siemens Quantum, headquartered at Quantum's Issaquah, WA, facility,has been given worldwide responsibility for Siemens' ultrasoundbusiness, he said. Creation of the new company in October followeda decision last spring to merge the sales and service staff ofSiemens Ultrasound in San Ramon, CA, with that of Quantum (SCAN6/5/91). Siemens purchased Quantum Medical Systems a year anda half ago (SCAN 4/11/90).

Siemens preexisting ultrasound business focused on cardiology,while Quantum provided high-end systems for radiology and vascularimaging applications. Along with the structural reorganizationof its ultrasound business, Siemens has pulled back from activeU.S. marketing of cardiac scanners, Leard said.

The vendor will continue to target markets outside the U.S.with its current cardiac line while it develops a new generationof equipment to meet the clinical needs of American cardiologists.Siemens Quantum will continue to upgrade, support and serviceits existing U.S. cardiac ultrasound installed base and will sellcardiac systems upon request, he said.

Siemens displayed its cardiac equipment at the American HeartAssociation meeting in Anaheim, CA, last month. It did so largelyfor international marketing purposes and to show the first resultsof technical cooperation with Cardiovascular Imaging Systems (CVIS)in the field of intraluminal ultrasound (SCAN 3/27/91), Leardsaid.

Intraluminal imaging has been added to Siemens' SI 1200 cardiacscanner as well as the SI 450, a small radiology scanner withoutcolor-flow Doppler. The vendor has not yet combined intraluminaltechnology with the Quantum 2000, its high-end color-flow radiologyultrasound scanner.

"We are not sure where that (intraluminal) market is rightnow. If there is a market, it appears to be in cardiology andnot so much in radiology. We are continuing research in this areaand continuing to work with CVIS," Leard said.

Siemens has combined intraluminal ultrasound with a pulsedDoppler transducer that rides on the tip of an angioplasty guidewire.

"You can see a dramatic change in flow pattern when youopen up a vessel. By using the two (intraluminal ultrasound andguidewire Doppler) together, you can actually predict flow,"he said.

Intraluminal ultrasound is an area where Siemens Quantum maybenefit from its ties to other Siemens imaging businesses. TheILUS Guidewire Doppler product could conceivably be packaged withSiemens' established line of cardiac catheterization equipment,he said.

Siemens Quantum has transferred all ultrasound sales, marketingand service functions to Issaquah. Although some cardiac salesstaff has been let go, many were transferred to the unified operations.The Siemens Quantum sales force is larger than the Quantum forcebefore the two were merged, he said.

The San Ramon facility will concentrate on new product development.Continuing engineering efforts for existing products will be basedat Issaquah, he said.

Siemens Quantum has direct responsibility for ultrasound salesthroughout the world except for Europe and the Soviet Union, whichare handled by Siemens world headquarters in Erlangen, Germany,Leard said.

Leard worked for Quantum prior to its acquisition by Siemens,as did David Croniser, Siemens Quantum marketing vice president.Siemens chose a manager from its San Ramon group to head up themerged company, however. President and CEO Mark Schardt was previouslyvice president of research and development for Siemens Ultrasound.Schardt served as president of Diasonics' ultrasound divisionprior to joining Siemens.

Quantum's former president, Lonnie Edelheit, left the firmearlier this year to rejoin GE as manager of that vendor's ElectronicSystems Research Center in Schenectady, NY (SCAN 6/19/91).

Siemens Quantum offers a full line of scanners for radiologyand specialist applications, including vascular, ob/gyn and urology.Sales to private-office physicians are handled by Chicago-basedSiemens Burdick, which is a separate Siemens subsidiary functioningas a distributor for Siemens Quantum, Leard said.

Siemens Quantum reports to its own board of directors and willinterface with Siemens Medical Systems in Iselin, NJ, as a sistersubsidiary, he said.

Siemens' decision to maintain its ultrasound business on aseparate track is consistent with efforts by other major multimodalityvendors, such as Philips and Toshiba, to separate out this imagingmodality from other medical business lines.

Ultrasound is one of the least expensive and most versatilemedical imaging modalities. As clinical applications of ultrasoundhave expanded, it has become the fastest growing segment of theindustry. Along with sales growth, however, has come an increasinglycomplex array of clinical customers.

"Ultrasound has been discovered. The (clinical) specialtiesare going to use ultrasound more and more. Some have gone as faras (to equate ultrasound with) a stethoscope," Leard said."It will be used to provide level-one studies. Specialistswill then send problems they find on to the radiologist. Therefore,equipment in radiology will become even more sophisticated andversatile than it is today."