Siemens Finds Mobile Partner
Siemens has possibly found a partner in the mobile industry, after a period of heavy losses in its mobile phones section. The joint venture between Siemens Mobile and Taiwanese BenQ is not far away, according to sources.
Siemens said in April that it planned to spin off and sell a majority stake in its cell phone unit amid declining sales and losses, including euro138 million (US$169.6 million) in the second quarter.
BenQ has not yet made any comment on the joint venture plans.
Other likely partners for Siemens could include Motorola Inc. and South Korea's LG Electronics Inc. and Samsung Corp.
Dan Bieler, an analyst with London's Ovum, said the meeting was a sign that some solution could be in the offing, but questioned whether any joint venture would bring Siemens back from the brink.
"In our view, the chance for Siemens Mobile lies in targeting the low-end segment. This might not be the most fashionable area to operate in, but might prove more profitable than past attempts to serve the fickle and rapidly changing tastes of high-end users," he said.
Low-end models favor function over flash and have been viewed as the best market for phone makers, given the sheer number of subscribers in Africa, the Middle East and places like India where consumers don't have the means to buy high-end models.
BenQ is Taiwan's biggest maker of mobile phones, selling them under its own name in China. It also manufactures phones for Motorola and NEC Corp. The company was spun off from electronics company Acer Inc. in 2001.
Beiler said that Siemens would probably have more to gain if it took a minority stake in any joint venture, but the problem is lack of demand for its handsets.
"Over recent quarters, it has been the Koreans and the Chinese that have been instrumental in changing the handset market in terms of design and model-lifecycles -- although Motorola has managed to make itself felt again recently," he said. "To effectively overcome its 'handset crisis,' Siemens should realize that its core strength is technology and not design or brand."
Almost 60% of BenQ's current earnings come from products addressed for other companies. With its cooperation with Siemens in the mobile phone industry, the company expects to gain higher margins and be ready to compete with Chinese mobile rival manufacturers.
BenQ has not yet made any comment on the joint venture plans.
Other likely partners for Siemens could include Motorola Inc. and South Korea's LG Electronics Inc. and Samsung Corp.
Dan Bieler, an analyst with London's Ovum, said the meeting was a sign that some solution could be in the offing, but questioned whether any joint venture would bring Siemens back from the brink.
"In our view, the chance for Siemens Mobile lies in targeting the low-end segment. This might not be the most fashionable area to operate in, but might prove more profitable than past attempts to serve the fickle and rapidly changing tastes of high-end users," he said.
Low-end models favor function over flash and have been viewed as the best market for phone makers, given the sheer number of subscribers in Africa, the Middle East and places like India where consumers don't have the means to buy high-end models.
BenQ is Taiwan's biggest maker of mobile phones, selling them under its own name in China. It also manufactures phones for Motorola and NEC Corp. The company was spun off from electronics company Acer Inc. in 2001.
Beiler said that Siemens would probably have more to gain if it took a minority stake in any joint venture, but the problem is lack of demand for its handsets.
"Over recent quarters, it has been the Koreans and the Chinese that have been instrumental in changing the handset market in terms of design and model-lifecycles -- although Motorola has managed to make itself felt again recently," he said. "To effectively overcome its 'handset crisis,' Siemens should realize that its core strength is technology and not design or brand."
Almost 60% of BenQ's current earnings come from products addressed for other companies. With its cooperation with Siemens in the mobile phone industry, the company expects to gain higher margins and be ready to compete with Chinese mobile rival manufacturers.
