Negative image undermines BenQ Mobile sell-off

In the end, plummeting sales and a devastated brand scared away potential investors from financially troubled BenQ Mobile, which failed to find a buyer to rescue it, according to the company's insolvency administrator.

"The biggest concern of investors was whether they could generate sufficient sales given the company's insolvency proceedings and the massive image loss of the BenQ Mobile and BenQ Siemens brands," said Martin Prager, the insolvency administrator, at a news conference in Munich on Wednesday.

Fourth-quarter sales plummeted to €51 million (US$68 million) from a forecasted €391 million, according to Prager.

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In the end, plummeting sales and a devastated brand scared away potential investors from financially troubled BenQ Mobile, which failed to find a buyer to rescue it, according to the company's insolvency administrator.

"The biggest concern of investors was whether they could generate sufficient sales given the company's insolvency proceedings and the massive image loss of the BenQ Mobile and BenQ Siemens brands," said Martin Prager, the insolvency administrator, at a news conference in Munich on Wednesday.

Fourth-quarter sales plummeted to €51 million (US$68 million) from a forecasted €391 million, according to Prager.

The lawyer met with more than 100 companies, conducting "extensive" negotiations with 31 of them. But all backed away from buying the company before the Dec. 31 insolvency deadline. No investor has submitted a bid since then, Prager said.

The BenQ Mobile brand has suffered so much that most of the potential investors have shown interest only in an earlier idea of converting the manufacturer into a designer of mobile phones for other customers, he said.

Under that plan, the company would narrow its focus on developing mobile phones as an original design manufacturer for customers with their own brands, including mobile operators, marketing companies and other handset manufacturers. A slimmed-down BenQ Mobile would rely on its competencies in the areas of mechanics, materials and miniaturization to develop and design new phones that meet the specific requirements of their customers, the company said.

"Apparently, this model still has a chance," Prager said. "But in the end, investors must decide for themselves how much risk they're willing to take."

The IDG News Service is a Network World affiliate.