Benq's handset hardship is costing it dear

BENQ IS to trim output and cut number of employees in its European and Taiwanese factories to boost cost efficiency, the manfacturing giant announced.

The move failed to halt the Taiwanese firm's stock price slide, as it suffered further woes.

Benq shares have declined to 43 per cent of their value at the beginning of 2006.

The company made around a $228 million loss for the first half of the year after it took over Siemens AG's loss-making handset division back in October 2005.

Benq has blamed its failure to unveil new handsets in Europe as the main reason behind its poor financial results.

According to the Taipei Times, BenQ has denied rumours that it is considering outsource handset production to Hong Kong based handset maker, Foxconn.

Benq recently announced it won't have its own stand at the 2007 Cebit show in Hanover. Germany is, of course, the chief market for the former Siemens branded handsets. However, leading handset vendors Nokia and Motorola are also said to be giving the CeBIT show a miss.

Benq has its work cut out in convincing observers that its purchase of the Siemens operation will prove valuable in the long run. µ