Influx

At Influx we have followed the developments of Ben-Q with interest. The company had built a reputation as a manufacturer of others people’s mobile phones and components, ostensibly a low-margin business.

To try and break the cycle, they went out and splurged on the Siemens brand. Now they are introducing their newly combined entity, Ben-Q/Siemens. a clear hedge, obviously Ben Q felt its developed something of a brand and is now reluctant to give up their name. The problem that this shows and demonstrates a company that is unclear of its future.

Are they German or Asian, let’s get the consumer to decide?

While the desire to move into the high margin business of branded phones, makes sense, it’s a very tough marketplace to crack. Even giants like Nokia have stumbled in recent years.

Buying a brand is no guarantee of success for these OEM supplier, they actually need to take it a step further and out innovate the category leaders. The great thing about the handset market is that it is fickle and fashion driven, but you need the product to play into the market. Ben Q’s sole contribution is the OLED screen, that’s starting to pop up in lots of areas of consumer electronics, like Sony mp3 players. Sadly, this is probably not enough gain a substantial footing in phones.

In China, there are dozens of OEM and component manufacturers desperate to move into higher-margin businesses. However, they need both innovation and brand which are expensive and take time to build.

Although, the clock is ticking and the threat is there, perhaps the leading Western brands don’t need to panic just yet, as long as they continue to invest in brand and innovation.