BenQ mum on possible partnership

BenQ Corp (明基電通), the nation's largest cellphone maker, yesterday declined to comment on news that it may become a joint-venture partner in the loss-making mobile handsets arm of Siemens AG, following a Financial Times Deutschland report published yesterday.

"This news was reported by Financial Times Deutschland according to its sources; we will not comment on the report," the company said in a filing to the Taiwan Stock Exchange yesterday.

The report led to shares of the company closing higher, up 0.5 percent to NT$33.4.

Meanwhile, local media reports said that BenQ was preparing the issuance of European Convertible Bonds (ECBs) worth US$10 billion for the deal.

In Munich, Siemens spokeswoman Maria Lahaye-Geusen, who on Saturday said the supervisory board would hold a telephone conference to discuss the matter, declined to comment.

The company's supervisory board was to hold a meeting yesterday to "explore the situation concerning Siemens mobile," the unit in charge of the firm's deficit-ridden cellphone operations.

The Frankfurter Allgemeine Sonntagszeitung weekly reported that Siemens would officially name its chosen partner for the business today.

Siemens said in April that it planned to spin off and sell a majority stake in its cellphone unit amid declining sales and losses, including US$169.6 million in the second quarter.

Analysts said the company had lost market share after being too slow in introducing new-tech features such as music players or high-speed Web access. Other likely partners for Siemens could include Motorola Inc and South Korea's LG Electronics Inc and Samsung Corp.

Siemens shares rose 0.7 percent to 60.68 euros (US$74.57) in morning trading in Frankfurt.

Despite BenQ's outcry over the swirling speculation, analysts believe the cellphone maker still has good reasons to team up with the German company.

"It should be for real this time. With the help of Siemens' brand power in Europe, BenQ will be able to build a foothold in the market rapidly," said Helen Chen (陳佩君), an analyst with Polaris Securities Co (寶來證券).

But BenQ would not benefit from purchasing Siemens' money-losing cellphone operation, Chen said.

However, another analyst, speaking under the condition of anonymity, said this would be a chance for BenQ to fulfill its aim of becoming a consumer electronics brand through tapping into the cellphone market.

Siemens' strong background in handset design and marketing would help BenQ overcome those difficulties, he said.

The deal would also partly offset pressure placed on BenQ by extra capacity after losing orders from Motorola last year if the two companies formed a joint venture, said Steven Tseng (曾續良), an analyst with Yuanta Core Pacific Securities (元大京華證券).

But that would be based on the premise that BenQ would spend less than 500 million euros (US$614 million) as reported previously, he said.

"Siemens' mobile phone unit isn't worth that much," Tseng said.