HANNOVER, Germany—BenQ Mobile appeared to be fulfilling its promise of creating intriguing handsets in a nimble timeframe, as it presented six new multimedia phones at the CeBIT trade show in Hannover, Germany this week. The new phones bring BenQ’s total number of new handset models introduced in the first quarter to a dozen, sending a signal to the market that its takeover of Siemens AG’s floundering handset business is bearing fruit.
However, BenQ still faces challenges. The market is watching to see how BenQ Mobile resolves its current production conundrum. BenQ Mobile inherited two production facilities in Germany as part of the Siemens deal and, under terms of its agreement, retains thousands of union employees there. Thus, the company is unable to move production to a country with lower labor costs, as many of the world’s handset makers have done. BenQ’s union deal expires in June and the company has offered to extend its agreement, under which union members work longer hours than under Siemens’ management. The IG Metall union has not yet accepted the offer.
Along with its new handsets, BenQ Mobile also delivered the typical flurry of promises at the CeBIT show, saying it plans to begin selling handsets in the second quarter that allow users to download software updates on the fly. The company also signed an agreement with Google Inc. to install the company’s local information searches on BenQ phones. Sony Ericsson Mobile Communications L.P. and Motorola Inc. have recently signed similar deals with Google. BenQ Mobile also plans to offer HSDPA-capable phones.
The handset maker, owned by Taiwanese technology group BenQ, is now the world’s sixth largest handset manufacturer behind Nokia Corp., Motorola, LG Electronics Co. Ltd., Sony Ericsson and Samsung Electronics Co. Ltd.
