SIEMENS HANGS UP ITS MOBILE PHONES.

PositionSiemens sells its mobile unit to BenQ Corp.

The German giant Siemens, one the pioneers of mobile phones, has decided to sell its activities in the mobile market, currently running at a loss, to the Taiwanese company BenQ. The move illustrates the extent to which Asian manufacturers of consumer electronics have grown in strength. Siemens, Germany's the third-largest industrial group, will not only fail to make a profit from the sale of the unit, it will also be forced to pay to rid itself of the loss-making division. In concrete terms, Siemens will pay Euro 250 million to help BenQ strengthen its presence in the mobile telephone market and a further Euro 50 million for a share in its capital.

Siemens was one of the front runners in the mobile sector, launching its first phone in 1986, but it has been looking for a buyer or a partner for its mobile arm for some time now.

Siemens is currently the only manufacturer in the top ten in this sector worldwide to be making a loss, estimated at Euro 1.5 million a day. Its market share dropped to 5.5% in the first quarter, compared to 8% during the same period in 2004, leaving it well behind the likes of Nokia (30.4%), Motorola (16.8%) or Samsung (13.3%).

The sale in itself is not of major importance for Siemens, since mobile phones only represent 1.5% of its global workforce and 6% of its turnover. But in terms of image, the damage is substantial. BenQ has agreed, initially, to take on the 6,000 affected employees, with the 3,000 workers based...

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