We believe we need to jump past the cost-down scenario, and move into a value-added scenario. With a brand we can reach end customers directly. Our `hometowns' are in Taiwan and China. Much effort has been placed to build this brand. We are also not a `me-too' brand. We are a premier brand in terms of the product, the services provided and the technology.

China, by 2004, was one of the fastest growing and the most competitive markets for mobile handset vendors. From 1999 to 2003, the total mobile subscriber base in the country had increased from 43 million to 257 million. In contrast, the penetration rate had reached only 20%. It was forecasted that by 2010, the number of subscribers would reach 535 million while the penetration rate would increase to 43%. By 2003, there were 37 domestic and foreign handset vendors in the country. While the market share of domestic vendors had increased from 24% in 2002 to 37% in 2003, that of the foreign players had declined from 77% in 2002 to 63% in 2003. Among the domestic companies, the largest handset vendor was Ningbo Bird with 9% market share, while the largest foreign handset vendor was Motorola with 19% market share.

In May 2004, BenQ Corporation (BenQ), a $3.2 bn Taiwan-based company, launched its branded mobile handsets in China. BenQ, which was formerly known as Acer Peripherals, had come a long way under the leadership of K Y Lee(Lee) since its inception in 1984. Throughout the 1990s, the company developed and manufactured computer peripherals such as monitors, keyboards, CD drives and scanners for the parent group Acer and third party MNCs such as Philips, on a contract basis. By early 1990s, the company started its Research and Development(R&D) efforts to develop cell phones and Liquid Crystal Display screens (LCD) and launched its first handset and LCD monitor in 1997. In early 2000, Acer Peripherals changed its name to Acer Multimedia and communications to focus on networking and communication devices and by 2002, it became the largest handset contract manufacturer for Motorola.

However, as margins in the contract manufacturing were coming under pressure, in 2002, the company also decided to launch products under its own brand name. It, thus, changed its name to BenQ which was short for "Bringing Enjoyment and Quality to Life". Under its brand name, the company marketed consumer products such as LCD TV, notebooks and digital cameras. Lee focused on China to develop the brand name business before going global. However, the company, initially, did not launch cell phones in China under the BenQ brand, as 80% of the handsets were being produced for Motorola. This contract accounted for approximately one-fifth of BenQ's total sales in 2003.