BenQ-Siemens Mobile Takeover
After several months of speculation,
Siemens have finally announced the effective disposal
of their mobile phones division to BenQ of Taiwan. Siemens
will transfer control of the division to BenQ along
with €250 million of support, and they will also buy
€50 million of BenQ stock as part of the deal.
It's hardly a vote of confidence in
Siemens Mobile - BenQ are basically getting the business
plus a dowry. In the short term, these
handsets will continue to be branded as Siemens, but
after that as BenQ-Siemens until 2010.
As a technological tie-up it makes a
great deal of sense - Siemens own a substantial amount
of intellectual property rights that BenQ would like,
BenQ is also shows some imagination in individual products,
and Siemens more an understanding of product ranges
as a whole. BenQ also has very little penetration
of the lucrative European marketplace, which Siemens
has a large proportion of. Quite how BenQ intend to
turn the loss making Siemens Mobile around is not certain.
As part of the deal, the Siemens-BenQ
Mobile operation will be headquartered in Germany and
it will maintain the Siemens manufacturing plant in
Germany, at least at present. This is a smart move,
because Germany is a hugely important marketplace for
Siemens Mobile, and some effort is being made to maintain
the new organisation's "German-ness".
BenQ is certainly a better respected
partner than the Chinese Ningbo Bird or Haier companies
that had been previously rumoured, and it's easy to
see that there are some useful synergies (a horrible
word, but one that's appropriate) between the two businesses.
There's an obvious comparison to be
made between the BenQ-Siemens tie-up and the creation
of Sony Ericsson. In each case, the European part of
the deal was a fading industry giant seeking a partnership
with a more dynamic Asian partner. However, the BenQ-Siemens
arrangement is basically a takeover of the Siemens business,
where Sony Ericsson is much more of a true joint venture
There are other significant business
too.. with Sony Ericsson, Sony added its own highly
respected name to the brand. BenQ is much more of an
unknown, and doesn't add at all to the branding. Both
companies had a measurable share in Europe, but BenQ
is almost invisible.
It's impossible to say if the BenQ-Siemens
business will be able to make a success of it. Siemens
Mobile has been losing market share as well as money,
and has had difficulty in getting operators to take
up some of its models. There have also been questions
over BenQ's build quality, especially with the handsets
supplied to O2 and branded as the X1i, X2, X3 and X4.
It seems clear though that the BenQ-Siemens business
will be in for a bumpy ride.
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