BenQ chairman Lee Kun-yao's (李焜耀) announcement last week that BenQ would stop funding its German subsidiary, BenQ Mobile GmbH, took most observers by surprise -- especially since the company only acquired the Siemens handset business last October.
It was a "painful" decision, Lee said, but one that had to be made. BenQ had booked losses of 600 million euros (US$760.8 million) from BenQ Mobile since the takeover of the Siemens unit. These losses had grown unbearably high compared to BenQ's total capital of NT$26.25 billion (US$793 million).
Despite the combination of Siemens' brand recognition and technological know-how with BenQ's manufacturing capabilities and ability to control costs, it was no secret that all was not well at BenQ's handset business. The company announced recently that it would downsize two cellphone plants in Taiwan, and earlier this year said it planned to shut down a cellphone plant in Mexico.
BenQ had hoped to win at least a 10 percent global market share, but only managed to secure 3.2 percent. Siemens effectively paid BenQ 250 million euros to take over its money-losing handset business, and BenQ faced tough challenges. It needed to prop up Siemens' falling handset market share while trimming operating expenses and manufacturing costs.
Worse, delays in handset research and development (R&D) postponed the launch of new products, which only added to the challenges in a market increasingly dominated by larger rivals Nokia and Motorola.
It is sad to see BenQ fail, but Siemens, which had been aspiring to the No. 4 spot for its handset unit, had fared no better. After all, the handset business is a high-volume business, with scale in both sales and R&D a key differentiator in the industry.
A year ago, BenQ had hoped that the takeover of Siemens' unit would help make it one of the world's leading players. But on Friday, BenQ Mobile filed for insolvency protection in a Munich court, a move aimed to protect the interest of creditors. BenQ Mobile will hand over its management to a new team appointed by the German government.
But whether BenQ can retain its ownership of the subsidiary remains questionable. The case is now in the German courts, amid strong protests from German unions and politicians.
Whether the company can continue operating the BenQ-Siemens co-brand is also in doubt, as Siemens said it may take legal steps against BenQ. Siemens said that the continued operations of its facilities in Germany were an important factor in its decision to sell its handset unit to the Taiwanese firm.
Investors are also wondering whether BenQ is just saying goodbye to European markets, or if it may leave the handset business altogether.
But the biggest concern BenQ's move has raised is whether other Taiwanese firms will now be discouraged from trying to become top global brands. If the nation wants to avoid this fate, then Taiwan Inc should look more carefully at what its firms need for success -- beyond strong manufacturing skills, cost control ability and ambition -- before making such a bold leap again.
Labubu, an elf-like plush toy with pointy ears and nine serrated teeth, has become a global sensation, worn by celebrities including Rihanna and Dua Lipa. These dolls are sold out in stores from Singapore to London; a human-sized version recently fetched a whopping US$150,000 at an auction in Beijing. With all the social media buzz, it is worth asking if we are witnessing the rise of a new-age collectible, or whether Labubu is a mere fad destined to fade. Investors certainly want to know. Pop Mart International Group Ltd, the Chinese manufacturer behind this trendy toy, has rallied 178 percent
My youngest son attends a university in Taipei. Throughout the past two years, whenever I have brought him his luggage or picked him up for the end of a semester or the start of a break, I have stayed at a hotel near his campus. In doing so, I have noticed a strange phenomenon: The hotel’s TV contained an unusual number of Chinese channels, filled with accents that would make a person feel as if they are in China. It is quite exhausting. A few days ago, while staying in the hotel, I found that of the 50 available TV channels,
Kinmen County’s political geography is provocative in and of itself. A pair of islets running up abreast the Chinese mainland, just 20 minutes by ferry from the Chinese city of Xiamen, Kinmen remains under the Taiwanese government’s control, after China’s failed invasion attempt in 1949. The provocative nature of Kinmen’s existence, along with the Matsu Islands off the coast of China’s Fuzhou City, has led to no shortage of outrageous takes and analyses in foreign media either fearmongering of a Chinese invasion or using these accidents of history to somehow understand Taiwan. Every few months a foreign reporter goes to
There is no such thing as a “silicon shield.” This trope has gained traction in the world of Taiwanese news, likely with the best intentions. Anything that breaks the China-controlled narrative that Taiwan is doomed to be conquered is welcome, but after observing its rise in recent months, I now believe that the “silicon shield” is a myth — one that is ultimately working against Taiwan. The basic silicon shield idea is that the world, particularly the US, would rush to defend Taiwan against a Chinese invasion because they do not want Beijing to seize the nation’s vital and unique chip industry. However,
RSS