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Weak demand for Siemens phones led the company to let Taiwan's BenQ take over the unprofitable unit.

BenQ Corp is Taiwan's biggest maker of mobile phones. As part of the deal, BenQ takes over Siemens' mobile phone unit, and Siemens acquires a 2.5 percent stake in BenQ.

Siemens has moved steadily away from the consumer market and focused on the industrial side of its business. Other European businesses like Ericsson and Alcatel have made deals to send some or all of their business to Asian firms.

Phones will be made under the Siemens brand for five years, as part of the agreement. Also, BenQ will gain control of Siemens' production facilities in Brazil and in Germany, in addition to one in Shanghai.

"With this partnership, we have found a sustainable perspective for our mobile phones business. BenQ and Siemens complement one another ideally. We will be uniting our strengths with BenQ's highly successful consumer business," said Klaus Kleinfeld, the CEO of Siemens AG.

"This will give BenQ, which up until now has been very strong in Asia, access to the European and Latin American markets where we hold leading positions."

David Utter is a staff writer for WebProNews covering technology and business. Email him here.