Siemens sells off mobile phone business

Siemens is selling its loss-making mobile phone business to Taiwanese technology firm BenQ, it announced today. The deal will take BenQ into the global top 10 for mobile phone vendors and will give it rights to the Siemens brand for five years.

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By  Peter Branton Published  June 7, 2005

Siemens is selling its loss-making mobile phone business to Taiwanese technology firm BenQ, it announced today. The deal will take BenQ into the global top 10 for mobile phone vendors and will give it rights to the Siemens brand for five years. The price of the deal was not announced, although the German firm said in a statement that it would incur a pre-tax loss of US$429 million this year as a result. The deal will also see Siemens take a US$61.5 million stake in BenQ. While Siemens phones were once in the global top five, the mobile business has long been a problem for the company, which had quality problems in high-end handsets and suffered from the steep price competition in the market. With the mobile unit losing millions of dollars a week for the company, rumours of a sell-off had been rife for months. “With this partnership, we have found a sustainable perspective for our mobile phones business,” said Klaus Kleinfeld, chief executive officer for Siemens AG. BenQ is mainly known for its phone business in its core Asia market only, with more than half of its products being built for other vendors rather than under its own brand name. In an exclusive interview with IT Weekly in April BenQ chairman KY Lee said that the company is planning to launch its mobile phones here in the Middle East (see IT Weekly 23- 29 April 2005). “With the acquisition of Siemens’ mobile phones business, we are rapidly approaching our goal to become one of the world’s leading players in the mobile phone industry,” Lee said in a statement. The phone business will remain headquartered in Munich, Siemens’ home town, where half its 3,000 staff are based.

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