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.
When Chinese President Xi Jinping (習近平) sits down with US President Donald Trump in Beijing on Thursday next week, Xi is unlikely to demand a dramatic public betrayal of Taiwan. He does not need to. Beijing’s preferred victory is smaller, quieter and in some ways far more dangerous: a subtle shift in American wording that appears technical, but carries major strategic meaning. The ask is simple: replace the longstanding US formulation that Washington “does not support Taiwan independence” with a harder one — that Washington “opposes” Taiwan independence. One word changes; a deterrence structure built over decades begins to shift.
The cancelation this week of President William Lai’s (賴清德) state visit to Eswatini, after the Seychelles, Madagascar and Mauritius revoked overflight permits under Chinese pressure, is one more measure of Taiwan’s shrinking executive diplomatic space. Another channel that deserves attention keeps growing while the first contracts. For several years now, Taipei has been one of Europe’s busiest legislative destinations. Where presidents and foreign ministers cannot land, parliamentarians do — and they do it in rising numbers. The Italian parliament opened the year with its largest bipartisan delegation to Taiwan to date: six Italian deputies and one senator, drawn from six
Recently, Taipei’s streets have been plagued by the bizarre sight of rats running rampant and the city government’s countermeasures have devolved into an anti-intellectual farce. The Taipei Parks and Street Lights Office has attempted to eradicate rats by filling their burrows with polyurethane foam, seeming to believe that rats could not simply dig another path out. Meanwhile, as the nation’s capital slowly deteriorates into a rat hive, the Taipei Department of Environmental Protection has proudly pointed to the increase in the number of poisoned rats reported in February and March as a sign of success. When confronted with public concerns over young
Taipei is facing a severe rat infestation, and the city government is reportedly considering large-scale use of rodenticides as its primary control measure. However, this move could trigger an ecological disaster, including mass deaths of birds of prey. In the past, black kites, relatives of eagles, took more than three decades to return to the skies above the Taipei Basin. Taiwan’s black kite population was nearly wiped out by the combined effects of habitat destruction, pesticides and rodenticides. By 1992, fewer than 200 black kites remained on the island. Fortunately, thanks to more than 30 years of collective effort to preserve their remaining
RSS