BenQ to cut new handsets after Siemens linkup

16th June 2005, Comments 0 comments

16 June 2005, TAIPEI - Taiwan's BenQ, after acquiring Siemens' cellphone unit on 7 June, plans to cut its handset models to concentrate on developing fewer but better models, BenQ Chairman Lee Kun-yao said in an interview published on Thursday.

16 June 2005

TAIPEI - Taiwan's BenQ, after acquiring Siemens' cellphone unit on 7 June, plans to cut its handset models to concentrate on developing fewer but better models, BenQ Chairman Lee Kun-yao said in an interview published on Thursday.

Lee told the Business Today weekly that cutting the number of models, integrating resources and cutting loss are among the first tasks BenQ will tackle after the takeover becomes effective on 1 October.

"Siemens and BenQ planned to launch 25 and 20 new models respectively. But after the merger, we need only to launch 35 or even less, instead of 45, so that we can concentrate our resources on developing different products," Lee said.

The other cost-saving move is to shift some of Siemens' overseas production to China and stop sponsoring the Formula One car race.

"In the past, Siemens' production base was in Germany, Brazil and China, which was 40, 30 and 30 percent respectively. In future we will change that to 20 (in Germany), 20 (in Brazil) and 60 percent (in China), and combine Siemens' production base in Shanghai with BenQ's production base in Suchou (near Shanghai)," he said.

What's more, BenQ-Siemens will continue to sponsor football teams in Europe and Latin America, but will stop sponsoring Formula One.

As for the fate of Siemens handset unit's 6,000 workers, half of them in Germany, BenQ will made a decision by next June.

"We will take over all of them on 1 October, and guarantee their jobs until next June. Then we will discuss what is best for all of us," Lee told the Chinese-language magazine.

Lee said the quality of Siemens workers is very high. "But production cost in Germany is high, so we will move some of them to Asia. I know some workers will protest, but they must know that handset business is at a critical juncture. If anyone tries to block reform, all of us will be losers."

BenQ hopes the takeover of Siemens' ailing handset unit will turn BenQ mobile phones into an international brand.

Last year, BenQ sold only 2 million BenQ handsets, accounting for 0.5 percent of global handset sales. In the first five months this year, BenQ handset shipments totalled 1.1 million, down 70 percent year-on-year.

DPA

Subject: German news

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