BenQ Corp, Taiwan's top maker of computer gear and mobile phones, is relying on a new team of Indian software engineers to help take on its Korean rivals, the president of its Asia Pacific operations said. BenQ, which launched LCD projectors, flat-screen monitors, televisions and mobile phones in India three-and-a-half years ago, recently set up a 50-strong research and development (R&D) centre in Bombay to design software for mobile phones. Even after the R&D team size doubles next year, it will still be only a tenth of the size of BenQ's R&D operations in China, which develops hardware as well as software, Adrian Chang, president of BenQ Asia Pacific Corp, told Reuters on May 10.
But the Indian centre can help cut the cost of products to take on aggressive Korean rivals Samsung Electronics and LG Corp. "We want to take advantage of the big pool of English-speaking engineers here to develop mobile software for all markets," Chang said on the sidelines of a news conference.
"This would be very significant to BenQ globally," he said.
Samsung plans to raise its R&D staff strength in India to 1,700 engineers by 2007. LG Electronics, Haier, Sony Corp and Nokia also have R&D centres here.
Unlike LG and Samsung, BenQ does not plan to set up a mobile phone manufacturing plant in India, but aims to offer cheaper phones from China and Taiwan with more efficient software design.
"Nearly 70 percent of the cost of the mobile phone is the software, so if we cannot compete on the cost of hardware, we can at least compete on the software," Chang said.
Analysts estimate 30-35 million mobile phones will be sold in the $3 billion Indian market in 2005, with that figure likely to rise to 50 million by 2008. BenQ plans to double its 3 percent share of the local market in 2005.
Nokia has an estimated 45 percent market share, but Samsung has quickly grabbed share with stylish high-margin phones with colour screens, while LG has aimed for the low- to middle-range.
All three are setting up phone-making plants in India. LG has already started with a $60 million investment, and plans to make 20 million GSM and CDMA phones a year in India by 2010 - half for export. Nokia is investing $100-$150 million in its plant.
India's wireless sector has grown at a compound 85 percent a year for six years, and has 52 million users. Yet only 5 in 100 people own a mobile phone, compared with more than 25 in China.
But Chang is confident mobile phone ownership will grow at a fast clip, boosted by India's large base of young people: More than half its billion-plus population is below the age of 25.
"Young people chase after new technologies and gadgets that can combine functions, like a mobile phone which has a camera and an MP3 player," said Chang.
"We find the Indian youth are very eager for technologies that let them combine work and play."
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