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BenQ to liquidate cellphone unit

BenQ Corp (明基) will liquidate the German mobile-phone division that it took over from Siemens AG a year ago after the Taiwanese company cut off financing in September and then failed to find a new investor for the unit.

Insolvency proceedings follow the lapse of a three-month period after the Munich-based company filed for bankruptcy protection, said a spokesman for BenQ Mobile insolvency administrator Martin Prager yesterday.

Prager will hold a press conference today to give more details.

Once among the world's top-three phone brands, the handset maker first stumbled under Siemens and then collapsed under BenQ because both owners failed to compete on a global scale with rivals such as Nokia Oyj. The breakdown affects more than 3,000 manufacturing workers and has hurt suppliers from chipmaker Infineon Technologies AG to phone-parts maker Balda AG.

Liquidating BenQ Mobile can only be averted if an investor makes an offer in the next few days, the IG Metall trade union said on Monday. Matthias Jena, who represents the German employees, said he doesn't expect an investor to appear.

In the third quarter of last year, BenQ's global share of the handset market fell to 2.4 percent as it shipped 6.1 million units, according to figures by market researcher Garnter Inc. That compares with a market share of 35.1 percent, or 88.1 million units sold, by industry leader Nokia in the period. BenQ ranked sixth on that list of mobile-phone makers.

Siemens, Europe's largest engineering company, gave up mobile-phone production in 2005 after years of losses. Mobile phones were among Siemens' last consumer products, as the company relies mainly on industrial clients for gear ranging from high-speed trains to energy turbines and medical scanners.

BenQ Mobile, which filed for insolvency protection at the end of September, has said it will axe about two-thirds of its 3,050 jobs in Germany. The company took over a factory in Kamp-Lintfort in western Germany from Siemens. The retreat cost Siemens more than US$1 billion, and the German phone maker also owns a stake of about 2.5 percent in BenQ.

BenQ in October said it posted its biggest loss in five years in the third quarter as it wrote down US$330 million of its investment in the unit it took from Siemens.
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