BenQ Mobile reveals Middle East strategy

BenQ Mobile is planning a major commercial assault on the Middle East with a raft of new mobile handsets and accessories scheduled for launch over the next 12 months. Aaron Greenwood reports

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By  Aaron Greenwood Published  April 6, 2006

|~|Kazi,-Najib-Ashraf-----200.gif|~|Najib Ashraf Kazi, VP of Sales and Marketing for BenQ Mobile.|~|BenQ Mobile, the new company created as a result of the acquisition of struggling Siemens Mobile Devices by Taiwanese consumer electronics and IT giant BenQ, is planning a major roll-out of new mobile handsets and accessories in an effort to build brand awareness in the Middle East. The company launched the first three handsets to bare the BenQ-Siemens brand in Europe in February, and plans to introduce around 30 new models worldwide before the end of 2006, with around half of these expected to be made available in the Middle East. While the first examples will mostly be redesigned handsets from the defunct BenQ and Siemens ranges, the company is working hard to improve its position through the development of new highly specified and stylish multimedia-enhanced handsets. The company also plans to leverage the brand equity previously established by Siemens Mobile Devices in the Middle East and Africa. According to Najib Ashraf Kazi, VP of Sales and Marketing for BenQ Mobile in the Middle East and Africa, while the Siemens brand struggled to compete globally with market leaders Nokia, Motorola and Sony Ericsson, it had successfully cornered a niche in the Middle East and African markets. “Siemens has had a presence in the Middle East and Africa for decades,” he says. “In the late-1990s, with the boom in mobile technologies, the company became a key player in the provision of infrastructure and mobile handsets in the region. “Our biggest advantage at the moment in terms of branding the BenQ-Siemens range is the Siemens connection. People know the brand. We are currently implementing a major marketing strategy promoting the new brand. This is a major challenge for us.” Kazi, who joined BenQ Mobile from Siemens Mobile Devices, claims Siemens’ decision to sell its mobile handset business to BenQ resulted from the company’s efforts to focus on its core engineering strengths. “Earlier this decade Siemens realised that as an engineering-centric organisation mobile handsets were not essential to its core business. So it decided to sell the division to BenQ,” he explains. “BenQ had been providing OEM manufacturing services for a range of high-profile handset vendors including Nokia and Motorola, but had little in the way of brand presence itself outside of Asia. The acquisition fitted with the company’s overall expansion strategy targeting new international markets.” As a result of the pace of the acquisition and ongoing development of the BenQ Mobile division, Kazi says Siemens’ operations are still being merged into the BenQ corporate structure. The acquisition represents a significant development for BenQ, a company that has built a solid foundation developing a diverse range of IT-focused products. Headquartered in Siemens Mobile Devices’ offices in Munich Germany, BenQ Mobile is also the first BenQ division to be based outside Taiwan. Kazi says that this strategy reflects BenQ’s commitment to providing BenQ Mobile with relative autonomy to focus its efforts on becoming a major player in the mobile handset market, with the ultimate goal of challenging the likes of Nokia, Motorola and Sony Ericsson. “Just over 17% of BenQ’s business previously related to mobile handsets,” he says. “Now it’s 65%. Obviously the company is committed to this business. We are a very hungry company. We are looking for quick gains and we know we have the tools to achieve these gains. We don’t have a ‘big brother’ [Siemens] looking after us any longer, so we’re more or less on our own.” Kazi says BenQ Mobile will review the existing channel strategies and partnerships forged by Siemens Mobile Devices in the Middle East to ensure the new company’s vision is realised in the marketplace. “We have directed our sales managers to revise our entire business model in respect to sales,” he says. “We are appointing new partners in the Middle East and Africa and we are reviewing our existing channel relationships. Some of our partners had become used to working in the Siemens style, and they were not ready to make the leap to BenQ Mobile way of thinking. “We will however continue to rely heavily on our channel partners to customise our product strategy for specific markets in the region. “From our headquarters in Dubai we will provide the broad outline of our strategy to them and the challenge is theirs to meet our commercial expectations. It is therefore vitally important that we appoint the right partners across the region.” Kazi stresses that the Middle East and African markets are fundamental to the growth of BenQ Mobile’s business worldwide. “The Middle East and Africa are two of the fastest growing regions in terms of demand for mobile services, handsets and accessories worldwide, while Europe is reaching saturation point,” he says. “In addition to our base in Dubai, we currently maintain regional offices in Kuwait and Morocco. Our biggest regional markets at present are Egypt and Kuwait, in addition to Pakistan and South Africa. These will be our core markets going forward over the next 12 months in terms of building our brand presence. We are also targeting key growth markets in the Gulf region and North Africa. “The commercial potential offered by the Middle East and Africa is only equaled by Asia, which is also a very important market for our business. Our competitors also recognise the potential of these regional markets which makes them the hottest worldwide.” ||**||New offerings|~|BenQ-Mob.gif|~|“We are not an entry-level brand and the prices for our mobile handsets will reflect this,” says Kazi.|~|Unlike BenQ’s previous entry-level mobile phone offerings, Kazi says the new range of mobile handsets will be pitched as premium products. “We are not an entry-level brand and the prices for our mobile handsets will reflect this,” he says. “However, they will be priced very competitively compared to our competitors’ high-spec offerings. “All of our handsets will feature multimedia functionalities such as mp3 players and digital cameras. We plan to launch a new range of handsets that actually physically resemble portable music players. “We will also revitalise our value-added product range, which includes mobile accessories such as bluetooth-enabled headsets, car kits and audio loudspeakers. “To build brand awareness, we are entering partnerships with high profile companies to develop special edition products. We recently launched a stylish handset range in conjunction with fashion accessories manufacturer Escada.” Kazi says the key to growing market share in the Middle East mobile handset market is through developing stylish and versatile handsets with inherent multimedia capabilities. However, he concedes that the limited availability of 3G services in the region acts as a deterrent to promoting the high-tech capabilities of these new handsets. “Our approach in terms of marketing the products is completely different to what we were doing at Siemens,” he explains. “We are focusing intently on handset design, with a major emphasis on aesthetics, and new and unique display technologies such ‘organic LED’, which is a world-first proprietary technology. Our handset designs have an emphasis on high quality materials – aluminum, titanium, steel and quartz. “You have to appreciate the consumer demands of mature markets such as the UAE and Saudi Arabia, where form is often more important than function. You cannot underestimate the importance of aesthetics when it comes to promoting high-tech handsets in these markets. “There is an added status placed on handsets im the marketplace that are 3G-capable, but to be honest, this technology is far less important in terms of generating consumer interest than sheer aesthetic appeal. “3G as a technology is still a phenomenon that Middle East consumers still aren’t willing or able to embrace. They are attracted to aesthetically appealing handsets but have no serious interest in using 3G services. SMS [short messaging service] is THE mobile technology of choice right now after voice services. Consumers are committed to accessing the internet from their PCs; they generally don’t want to access it from their mobile phones.” Kazi says the onus remains on Middle Eastern network operators to generate consumer interest in 3G by making services more readily available across the region. He notes the development of next-generation multimedia protocol technologies, such as high-speed downlink packet access (HSDPA) services in Europe, as an indication that local operators are lagging behind their international counterparts and missing out on a golden commercial opportunity to generate consumer demand for mobile multimedia services. “Network operators in the Middle East really need to become far more aggressive in terms of promoting their 3G services,” he says. “Application services like 3G video have the capability to captivate consumer interest, but the availability of these services is limited. “We plan to launch six to eight new 3G handsets worldwide this year. However it doesn’t make sense to launch these products in this market. “We will also launch two HSDPA handsets in Europe prior to the FIFA World Cup in June that will allow users to download and watch live matches. These handsets will also be made available to us, but given that we struggle to explain the benefits of 3G to local consumers, how can we ever expect to sell these products in this region?” In the short-term, Kazi says that BenQ Mobile is determined to address the time-to-market issues that impacted Siemens’ mobile handset business so severely. “The thing that always haunted us at Siemens was our inability to get products to market in a timely manner, but this is something we’re determined to correct at BenQ Mobile,” he says. “Time to market is the key to success in the mobile handset sector. If you face delays in terms of product roll-out, you lose the game. “We are going toe-to-toe with our competitors in the market and some of them have great products. Time will tell. We just have to ensure we introduce the products that captivate consumer interest.” ||**||

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