Wireless Federation

Worldwide handset sales increased 16% to 1.153 billion units in 2007, driven by rising demand in emerging markets, says Gartner.

Nokia, the biggest phone vendor, increased its market share to 37.8%, up from three percentage points from a year earlier. In a disastrous last quarter, Motorola fell nearly ten points to 11.9% over the previous year.

Strong sales in China and India lifted Chinese handset supplier ZTE into top ten for the first time with a 1.2% market share. But the popularity of high-end BlackBerry and iPhone devices also put smartphone vendors RIM and Apple in the top ten. Taiwan’s BenQ, France’s Sagem and China-based Bird were the three displaced from the top group.

Gartner predicted growth to decline to 10% in 2008, with western Europe and North America contributing to just 30% of sales.

Gartner mobile devices research director Carolina Milanes said the strength of emerging market demand meant that handset sales were likely to be “relatively immune to a recession” in the US and western Europe.

Wireless Mobile Telecom Wireless News

Losing money quarter after quarter in the mobile phone market, PC World reports that Taiwan’s BenQ is finally moving to a new direction - computer monitors and digital projectors. Apparently, the cutthroat competition is too much to handle for this company.
No, they will not abandon their mobile phone product line but it won’t be a priority in terms of marketing expenses and other allocations. Which means no more Real Madrid football club sponsorship but more focused spending on the performing brands.

I think the next logical step here is culling of non-performing models and slow detachment in anything related to mobile phones. Eventually, there might be interested investors brave enough to acquire this division for a very low value and turn it over. Well, one’s company’s misery is another company’s gain.

Wireless Mobile Telecom Wireless News

The insolvency administrator for BenQ Mobile Germany is suing parent company BenQ for a further 26 million euros ($36 million) on top of more than 80 million euros it is already claiming.

Insolvency administrator Martin Prager said in a statement from his PR agency the 26 million euros were partly for bonus payments promised to Germany-based BenQ Mobile employees by BenQ which were in fact paid by the subsidiary, BenQ Mobile.

The Prager statement said the former BenQ Mobile staff may have to pay back the bonuses if BenQ did not pay up. About 3,000 workers were made redundant through the bankruptcy.

BenQ Mobile was formerly Siemens mobile, the loss-making handsets business of German industrial group Siemens. The takeover of the business propelled BenQ, whose mobile phones business was previously tiny, into the global top ten.

BenQ Mobile filed for insolvency in Germany at the start of this year after failing to turn the business around despite pouring in hundreds of millions of dollars.

Loss-making Taiwanese electronics group BenQ has in the past rejected Prager’s demands of payments for creditors.

The company, which has said it will spin off its struggling BenQ brand to refocus on contract work, has said it will return to profit at the end of 2007 or early next year.

Wireless Mobile Telecom Wireless News

BenQ Corp., the Taiwanese electronics maker whose chairman stands trial on insider-trading charges, posted its first profit in seven quarters on gains from selling shares in flat-screen affiliate AU Optronics Corp.
Net income was NT$570 million, Taoyuan, Taiwan-based BenQ said in a statement yesterday. It didn’t release year-earlier numbers. BenQ was expected to report a net loss of NT$424 million, according to the median estimate of four analysts Bloomberg News surveyed by telephone and e-mail.

BenQ sold a stake in LCD maker AU Optronics in the quarter to raise cash after Chairman K.Y. Lee’s 2005 acquisition of Siemens AG’s mobile-phone unit failed to bolster profit. The company’s efforts have been overshadowed by the court case involving Lee and other senior executives. Lee, who has denied the charges, is chairman at BenQ and AU Optronics.

“As they get back to manufacturing, then profit might improve,” said Michael On, who doesn’t count BenQ among US$100 million in his portfolio as managing director of Beyond Asset Management Co. in Taipei. “I would recommend a buy on this stock only because it couldn’t get any worse.”

Third-quarter sales will climb from the previous period because of “high season,” BenQ said in the statement, without elaborating. The company reported second quarter sales of NT$32.4 billion.

Shares of BenQ rose 3.6 percent to NT$15.90 yesterday before earnings were announced, while the benchmark TAIEX index rose 2.8 percent.

The company, whose products include mobile phones, personal computers and liquid-crystal display monitors, will change its name to Qisda Corp. as of Sept. 1.

BenQ posted a second-quarter operating loss, which measures sales minus operating expenses, of NT$1.91 billion after “cleaning” mobile-phone inventory, according to the statement.

Non-operating items added NT$2.52 billion to earnings, mainly as a result of the gain from selling AU Optronics shares. The company doesn’t break down non-operating income.

AU Optronics, in which BenQ owns a 8.42 percent stake, is the world’s third biggest maker of LCDs. BenQ booked a profit of about NT$1.5 billion from selling 100 million shares of AU Optronics in April.

BenQ will benefit from getting LCDs from AU Optronics as the two companies work to “strengthen business ties,” said Hsiung Hui, an AU executive vice president, at the meeting. Hsiung will become BenQ president as of next month, replacing Sheaffer Lee.

The global LCD panel market is expected to “face a shortage in the next two years” as screen producers are slow in expanding factories, Chairman Lee said at the meeting.

BenQ cut funding to BenQ Mobile GmbH & Co. in September of last year, forcing the unit into bankruptcy. To boost earnings, BenQ plans to spin off the business that makes branded electronics to focus on providing manufacturing services for other companies.

“The company’s profitability should improve sequentially in the second half as it separates the unprofitable branded handset business,” Robyn Hsu, who doesn’t own BenQ shares among the US$426 million funds he helps manage at Truswell Securities Investment Trust Co. in Taipei, said before the earnings announcement.

Lee, 54, will step down as chief executive officer of AU Optronics on Sept. 1 after he was charged with insider trading as well as money laundering, stock manipulation and falsifying public documents.

The executive has undergone two preliminary court proceedings to defend himself since July. The court didn’t set a date for when the case will continue when it convened earlier this week.

Indictments against Lee came after a two-month probe by Taiwan prosecutors into share sales by BenQ executives between January and March 2006 before the company announced its first- ever quarterly loss, prosecutors said in May.

BenQ President Sheaffer Lee and Chief Financial Officer Eric Yu were also charged with insider trading, money laundering, stock manipulation and falsifying public documents. The two executives have denied any wrongdoing.

Wireless Mobile Telecom Wireless News
 

Digital network service player BenQ has launched its EF71 mobile phone in the Indian market. The model has a 2.2″ TFT screen with 262,144 colours that provides crystal clear view even in sunlight.
The EF71’s FM receiver is paired with an exclusive built-in FM transmitter that helps the user to broadcast the phone’s MP3 music on his/her home or car stereo without the hassle of cables or connection kits.

The FM transmitter allows transmitting the music which the user plays on the MP3 of the phone to a close by radio and can hear the music through the speakers of the radio which would be louder.
 
 
The music player is loaded with features like multiple audio playback support (MP3/AAC/AAC+/WMA), 10-band equalizer and 3D-surround sound. All playback functions like play, skip, pause or stop can be performed without even having to flip open the phone.

The phone has a 2.0-megapixel camera that allows for video recording at 30 frames per second and a 3x liner digital zoom.

It also provides easy connectivity to your laptop or computer with a USB cable and it can be used as a webcam. BenQ India Marcom head Ish Bawa said, “There is a huge demand in the market for stylish and feature-rich phones. People want their mobile phones to do everything – play music, video clips, games, click pictures, record videos, support latest mobile softwares and also look stunning. Therefore, the new BenQ EF71 fits the bill perfectly.”

Wireless Mobile Telecom Wireless News
 

 The brawl after the BenQ Mobile insolvency does not end: Now insolvency administrator Martin Prager filed another lawsuit against the Taiwanese parent company BenQ Corporation, following two similar lawsuits filed in mid-July.
The most recent complaint refers to bonus payments of €28 million (about $38.3 million) the parent company had granted to several top managers of the German subsidiary. Since the amount indeed has been paid by the German subsidiary which shortly afterwards went bankrupt, the insolvency administrator now claims the money back. If the BenQ Corp. won’t pay, Prager will reclaim the amount from the recipients.

In this context, the insolvency administrator also has obtained an arrest in BenQ Corp. assets in Germany and in the Netherlands.

In addition, the insolvency administrator has sent an objection note to BenQ Corp., which aims at preventing the planned split of the company into a manufacturing service provider and an entity that pursues BenQ’s own brand business. However, BenQ Corp so far failed to react to Prager’s move.

In mid-July, the insolvency administrator had filed a lawsuit targeting at asset transfers from the German subsidiary to the Taiwanese parent company ahead of the insolvency. According to Prager’s office, this claim has a value of €80 million.

Wireless Mobile Telecom Wireless News

Belgian wireless technology firm Option has acquired a team of engineers and laboratory facilities from Taiwanese electronics group BenQ Mobile. The team of fifty highly qualified engineers, located in Kamp-Lintfort near Duesseldorf, add mobile experience and expertise to Option’s global engineering capability. The team reports to and collaborates with Option’s HQ engineering group in Leuven and will focus on the development of embedded broadband cellular connectivity solutions for mobile internet devices. Existing engineering resources at Option’s Leuven HQ will concentrate on wireless data cards, USB devices, modules for laptops and wireless routers. Option will acquire facilities in Kamp-Lintfort including fully equipped laboratories, an Electro-Magnetic Compatibility test chamber and office space which will require a one-off investment of EUR 4 million.

Wireless Mobile Telecom Wireless News

Gulf-Times writes… Struggling to boost sales in a maturing mobile phone industry gripped by cut-throat competition, several Asian handset makers are heading for extinction.
NEC Corp of Japan, Taiwan’s BenQ Corp and China’s Ningbo Bird Co Ltd are among those suffering from the absence of economies of scale in production and distribution to compete with leaders like Nokia and Motorola.

But a handful could survive by growing their partnerships with telecoms carriers in developed and emerging markets, and supplying them with attractive, quality phones.
“The trend is that regional players are struggling and global players are winning,�? said Bengt Nordstrom, chief strategy officer with research firm inCode. “For a smaller Asian handset maker to compete with Motorola and Nokia in the low-end segment is almost mission impossible.�?

Some small South Korean players are already teetering on the brink. Pantech Co Ltd and Pantech&Curitel Communications Inc are undergoing debt restructuring, hit by heavy losses from stiff competition and eroding margins, while VK Corp, once known for its ultra-slim phones, was placed under court receivership this month.
BenQ, Taiwan’s top mobile phone vendor, posted its fifth straight quarterly loss earlier this week, dragged down by its ailing handset business after it declared its German unit insolvent late last year, and warned of weaker sales.

Even sector heavyweight Motorola has not been spared. The US firm warned on Wednesday of a first-quarter loss and a worse-than-expected 2007 outlook due to weak sales and pricing pressures, despite growing its global share last year.
Industry leader Nokia expanded its market share last year, while Sony Ericsson overtook South Korea’s LG Electronics Inc to grab fourth position.

But most of the smaller Japanese cellphone makers, which command less than 1% share of the global market, are suffering. Many have retrenched staff over the last few years, hit by the industry’s competitive environment.

These players could grow their miniscule share by offering revolutionary products ahead of their larger rivals, such as fuel cell-powered phones and handsets capable of ultra-fast data transmission, said Gartner analyst Michito Kimura.

The niche strategy of supplying premium handsets to operators in developed overseas markets, which has boosted margins and profits for these firms, would also ensure their survival, said Gartner analyst Ann Liang.

Japan’s top mobile phone supplier Sharp Corp works with Britain’s Vodafone Group Plc, while Toshiba Corp has partnered with Orange in Spain and France.
“It’s hard to imagine a global player emerging from Japan at this late stage, although one exception to the rule might be Sharp,�? said Neil Mawston, analyst with Strategy Analytics.
Sharp has built a healthy niche position in third-generation (3G) mobile technologies across western Europe, thanks to its advanced offerings and attractive phone designs.

“But despite its success, it is unlikely to move beyond niche status globally, due to limited economies of scale,�? he added.

Likewise, many Chinese mobile phone makers, with less than 1% share globally, will have to exit the market or merge with rivals, as the industry’s supply glut bites. Analysts estimate that at least 35 domestic brands exist.

“The outlook for Chinese brands is weak. Nokia and Motorola have been flexing their muscles in China since 2005 and have already crushed most of the domestic competition with their larger marketing and distribution budgets,�? Mawston said.

But a handful of Chinese phone makers such as Lenovo Group Ltd, ZTE Corp and Huawei Technologies Co Ltd, which supply reliable and feature-rich handsets at reasonable prices to operators in Europe, Latin America and Africa, are emerging as credible niche players.
Their small scale, however, would still limit their global reach.

iSuppli analyst Kevin Wang is forecasting declining overseas and domestic shipments for Bird this year, but expects Huawei and ZTE to boost their sales sharply, thanks to phone supply contracts from carriers like Vodafone and India’s Reliance Communications Ltd.

Wireless Mobile Telecom 

itnews writes…Management rejects offer as mobile creditors line up.

Fallout from a disastrous mobile phone deal continues at Taiwanese manufacturer BenQ, which has reported a net loss of US$238 mn for the fourth quarter of 2006.

The company has suffered five consecutive quarters of losses following its takeover of Siemens’ mobile phone division.

K Y Lee, BenQ’s founding chairman and chief executive, offered his resignation to take responsibility for the mobile division’s problems earlier this week.

However, BenQ announced that the board “demanded he continue his role to reach the target of turning around the company as soon as possible”.
The company blamed the losses on the mobile phone business, and servicing and warranty costs in particular.

Consolidated sales for the normally strong fourth quarter slid to US$1.04bn, down from US$1.22bn in the previous quarter.

In Germany, administrators called in to wind up the bankrupt BenQ Mobile division told reporters they were examining whether BenQ could be liable for US$1.6bn in debts owed by the subsidiary.

Adding to the company’s problems, last week BenQ chief financial officer Eric Yu was detained on the order of a prosecutor investigating allegations of insider trading one year ago.

BenQ makes or sells a wide variety of PC peripherals and consumer electronics products, including LCD monitors. The company continues to manufacture mobile phones in Asia.

BenQ’s troubles are a marked contrast to the successes of its former parent company, Acer, which has surged ahead in the PC and notebook markets over the past year.

Acer and BenQ remain affiliated, with substantial cross shareholdings, common investors and some executives moving between the two firms.

Wireless Mobile Telecom 

 Tmcnet writes…As competition intensifies, the future prospects of Motorola’s (News - Alert) mobile phone market are looking thinner than its thinnest phones. Blaming it all in the weaker than expected mobile phone sales, Motorola replaced its chief financial officer and cut its first-quarter sales forecast. According to Motorola’s chairman and CEO Ed Zander, the performance of Motorola’s mobile device business is “unacceptable�? and the company is expected to report a first-quarter loss very soon.
Thomas Meredith will replace the retiring David Devonshire as the acting chief financial officer. Greg Brown, who is currently the president of the company’s networks and enterprise business, will be the new president and chief operating officer. These surprise announcements came just after the resignation of the head of the handset business a month ago. Industry experts believe that this is the sign of a deeper turmoil within the ranks of Motorola.
 
Earlier, Motorola had predicted a sale worth $10.4 billion (euro7.82 billion) to $10.6 billion (euro7.97 billion) for the period January through March quarter. It has now scaled down the predictions by approximately $1 billion (euro0.75 billion) and the current predictions stand at $9.2 billion (euro6.92 billion) to $9.3 billion (euro7 billion). While the analysts surveyed by Thomson Financial forecasted a 17-cent profit on the Motorola shares, the company forecasted that there will be loss of 7 cents to 9 cents per share, including 9 cents per share in charges.
After terming the performance of the mobile business unit as “unacceptable,�? Motorola is now gradually realizing that restoring the profitability of the mobile business unit will take much more than just changing top level leadership. It will instead also take huge effort and a longer time to return to profitability as rivals like Samsung (News - Alert) and Nokia are continuously raising the bar. To Motorola’s credit, it’s not having any unrealistic expectations and expects that sales, profitability and operating cash flow for the full year will be “substantially” below its prior guidance.
 
One of the major reasons for a decline in sales for Motorola mobile sets is the company’s unwillingness to cut the prices of the low end models– something its competitors did. But the company officials feel that this decision will prove to be right in the long run. To arrest the increasing losses and restore profitability, Motorola is taking many new measures such as reshuffling the management, buying back more of its lagging stock, accelerating $2 billion (euro1.5 billion) of share repurchases and increasing the size of its current share repurchase program to $7.5 billion (euro5.6 billion).
 
This has not been a very encouraging quarter for mobile phone giants like Motorola and BenQ. In the last two years, Motorola had witnessed a meteoric rise in the sale of its mobile phones thanks to the immensely popular Razr phones. This had forced even the number one manufacturers like Nokia (News - Alert) to alter their strategies and come up with slim phones. As the future looked rosy and bright for Motorola, the company stunned the market by disclosing a steep drop in profitability in the handset division that resulted in its least profitable quarter since 2004.

Wireless Mobile Telecom