LIBERTYVILLE, Ill.—Motorola Inc. flexed its muscles today in acquiring the research and development capabilities from a small competitor—the second time Motorola has done so in less than a year.
Motorola said it plans to buy one of BenQ Mobile’s research-and-development centers and its 250 product-development engineers in Aalborg, Denmark, the “Danish Silicon Valley.” The deal is expected to close in June; terms of the agreement were not disclosed.
The move could give Motorola a boost in its efforts to develop handsets for the European market, where it has achieved market share second only to rival Nokia Corp.
According to Gartner, Motorola is working on bringing to market a new 3G platform to maintain its momentum in the European market. It’s not clear whether the acquisition of R&D capabilities from BenQ is directly related to the development of a new 3G platform, but it will give the American handset giant the benefit of local, European sensibilities in competing with rivals on the continent.
Further, the acquisition will enable Motorola to bolster its capabilities not only in mobile phone development but also in software application development and antenna technology, according to Ron Garriques, president of Motorola’s mobile phone business.
“The Aalborg team will support Motorola’s development of innovative, new mobile devices that increase our ability to deliver breakthrough products and experiences that integrate the technologies of both Motorola and our strategic partners,” Garriques said.
In July 2005, Motorola acquired the R&D operations and patent portfolio of the ailing European mobile phone start-up Sendo. The deal gave Motorola the services of 200 engineers: 170 in Sendo’s headquarters in Birmingham, United Kingdom, and another 30 in Singapore.
For BenQ, the deal gives it the chance to streamline its own R&D and product development work after reporting two disappointing quarterly financial losses despite strong sales. The Taiwanese manufacturer is attempting to thrive in a global market increasingly dominated by the “Big Five” vendors: Nokia, Motorola, Samsung Electronics Co. Ltd., LG Electronics Co. Ltd. and Sony Ericsson Mobile Communications L.P. BenQ is the world’s sixth largest handset maker, according to research firm Gartner.
BenQ Mobile debuted in October 2005 after Siemens, the German manufacturer, paid it to take over its ailing handset operations. BenQ has honored an agreement to keep German workers in place until June, but industry analysts expect the company will move its manufacturing base to a less expensive labor market to cut costs. At the same time, BenQ is trying to establish its brand as synonymous with high-end handsets to rival Motorola’s best-selling Razr and video phones from Samsung and LG.
