Compal concerned by Motorola break up

Compal Communications, one of Motorola’s key handset OEM makers, has raised concerns that a China-based consortium may take over Motorola’s handset unit. Motorola, a US vendor, said last week that it is considering separating its handset unit from the rest of its operations, because the unit has been losing serious money.

Rock Hsu, chairman of Taiwan-based Compal Group, is concerned that if China-based companies took control of Motorola’s handset unit, they would switch handset production to OEM makers in China.

Hsu is keen to stress that any order adjustment would take 12-24 months, and as such Motorola’s plans to sell the handset unit will have no effect on Compal’s operations in 2008.

Asked if Compal might take over Motorola’s handset unit, Hsu replied that Compal does not currently have the base to operate a brand product, and so instead they will continue to expand their pool of OEM clients.