In 1887 Emil Rathenau had established Allgemeine Elektrizitäts-Gesellschaft (AEG), which became a long-time rival. Werner von Siemens retired in 1890, Johann Georg Halske had already left the company in 1867. Werner von Siemens' brother Carl Heinrich together with Werner's sons Arnold and Georg Wilhelm in 1897 founded the Siemens & Halske AG located in Charlottenburg. From 1899 on it had a vast new site erected on the banks of the western Spree river, later known as Siemensstadt.
When Siemens & Halske merged parts of its activities with Schuckert & Co., Nuremberg in 1903 to become Siemens-Schuckert, Siemens & Halske AG specialized in communications engineering. During World War I, rotary engines of advanced and unusual design were produced under the Siemens-Halske brand, like the Siemens-Halske Sh.I and Sh.III. Later Siemens established several company subsidiaries for which the Siemens & Halske AG functioned as a holding company.