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Monday, June 20, 2005
BenQ Corp, Siemens AG to streamline handset models

After BenQ acquired Siemens, the new firm will reduce the number of cellphone models offered and develop higher-end handsets, BenQ's chairman revealed

BenQ Corp, after acquiring Siemens AG's cellphone unit on June 7, plans to cut its handset models to concentrate on developing fewer but better models, BenQ Chairman Lee Kun-yao said.

Lee told the Chinese-language Business Today weekly in an edition published yesterday that cutting the number of models, integrating resources and cutting loss are among first tasks BenQ will tackle after the takeover becomes effective on Oct. 1.

"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.

During an interview with reporters, Lee, 52, said that steps to combine the cellphone division, to be based in Germany after the formal handover on Oct. 1, are proceeding well, with few Siemens staff so far resigning.

He also said the two companies are discussing how to combine marketing, including whether BenQ should share in advertising costs such as for Spain's Real Madrid soccer team, which dons shirts with the Siemens name.

"Definitely, we will share some" of the costs, Lee said. "I think it's good to show our new [logo] in high-profile sports."

But the company will stop sponsoring Formula One car race, Lee said. The other cost-saving move is to shift some of Siemens' overseas production to China.

"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]," Lee said.

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 Oct. 1, and guarantee their jobs until next June," Lee told the Chinese-language magazine.

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