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Loss-making BenQ Mobile plans to outsource production of its handsets as it struggles to make a profit from the business it took over from Germany’s Siemens last year, a German magazine reported on Wednesday.
In an advance copy of an article to be published on Friday, Manager Magazin said representatives of Taiwan-based parent company BenQ had already been negotiating for two months with Foxconn and Jabil Circuit.
A spokesman for BenQ Mobile, which has its headquarters in the German city of Munich, declined to comment on any possible plans to outsource production. BenQ headquarters in Taipei also declined comment on the report. advertisement
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The BenQ Mobile spokesman reiterated that BenQ Mobile aimed to become profitable in mid-2007 - a goal it recently pushed back from the end of this year - and said the company’s market share had stabilised at just above 3 percent last quarter.
BenQ Mobile inherited production sites, most of them in high-wage Germany, from Siemens. It recently extended a deal for longer working hours at two German production plants employing 1,900 staff until the end of the year.
BenQ, which also makes flat-panel TVs and display monitors for PC makers, posted a third straight quarterly loss last month and forecast flat third-quarter sales and shipments for the current quarter on stiff competition in the handset market.
Hong Kong-based Foxconn, which generates the bulk of its sales making phones for names such as Motorola or Nokia, was not immediately available for comment on the magazine report.
Florida-based Jabil, which makes electronic components for mobile phones and computers, was not immediately reachable.
The Manager Magazin report also said some production would move to Mexico, in the first instance, and added that a large factory in China was also available.
The BenQ Mobile spokesman said the company had five production lines for mobile phones at a BenQ factory in Taiwan and one handset production line at a BenQ plant in Mexico, all of which were due to be shut down by the end of the year.
He declined to comment on how far below production capacity BenQ Mobile was currently running, beyond saying it was under 100 percent.
