BenQ to Shutter Beijing Handset R&D Center
DEC 18, 2006 08:07:45 AM
BenQ will close a mobile phone research and development center in Beijing as it continues to slim operations. The company opted earlier this year to stop investing in a German subsidiary due to rising losses.
The Taiwanese company will shift work from the Beijing center to R&D labs in Suzhou, China, and Taiwan, BenQ said Monday. Closing the Beijing facility will help it reduce costs and work more efficiently, it said.
Around 400 workers in Beijing will be affected by the closure, but some of them are expected to relocate to Suzhou.
The closure shows BenQ is still trying to recover from its push to become a global handset player via BenQ Mobile, the mobile phone operation it took over from Siemens last year.
The operation was such a burden to Siemens that it paid BenQ €250 million (US$327.1 million) to take it over. It proved too difficult for BenQ to turn around, despite strong intellectual property and a solid brand name in Europe.
The decision to step away from the business cost BenQ dearly, and the company still faces financial troubles from the move. BenQ lost NT$12.22 billion (US$375.1 million) in the third quarter of this year, mainly due to inventory and impairment charges related to BenQ Mobile. It was BenQ’s fourth straight quarterly loss.
In all, the Taiwanese company reckons it lost over US$1 billion in its mobile phone operations over the past year.
Analysts roundly blamed stiff competition in the mobile handset business for BenQ’s troubles. Nokia and Motorola have been taking market share away from most of their rivals in the handset business this year.
-Dan Nystedt, IDG News Service (Taipei Bureau)
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