DBTEL Inc. (; formerly ) is a multinational telecommunications company based in
Taipei
Taipei (), officially Taipei City, is the capital and a special municipality of the Republic of China (Taiwan). Located in Northern Taiwan, Taipei City is an enclave of the municipality of New Taipei City that sits about southwest of the n ...
,
Taiwan
Taiwan, officially the Republic of China (ROC), is a country in East Asia, at the junction of the East and South China Seas in the northwestern Pacific Ocean, with the People's Republic of China (PRC) to the northwest, Japan to the nort ...
. Founded in 1979 by Michael Mou, the company initially focused on
cordless telephone
A cordless telephone or portable telephone has a portable telephone handset that connects by radio to a base station connected to the public telephone network. The operational range is limited, usually to the same building or within some short ...
s. In the 1990s, DBTEL once took up 30% of the
original equipment manufacturer
An original equipment manufacturer (OEM) is generally perceived as a company that produces non-aftermarket parts and equipment that may be marketed by another manufacturer. It is a common industry term recognized and used by many professional or ...
market share for United States cordless phones. It later became an
original equipment manufacturer
An original equipment manufacturer (OEM) is generally perceived as a company that produces non-aftermarket parts and equipment that may be marketed by another manufacturer. It is a common industry term recognized and used by many professional or ...
(OEM) for
cell phone
A mobile phone, cellular phone, cell phone, cellphone, handphone, hand phone or pocket phone, sometimes shortened to simply mobile, cell, or just phone, is a portable telephone that can make and receive calls over a radio frequency link whil ...
s. Between 1998 and 2002, it made phones for
Motorola
Motorola, Inc. () was an American Multinational corporation, multinational telecommunications company based in Schaumburg, Illinois, United States. After having lost $4.3 billion from 2007 to 2009, the company split into two independent p ...
and at one point was its largest manufacturer. The two companies ended their contract after legal disputes and weakness in the mobile phone market. After facing numerous challenges, DBTEL, which had unstable OEM sales, transformed from an OEM company into selling its own brand.
DBTEL became the first Taiwanese mobile phone producer to receive China's authorisation in 2000 to market branded cell phones and released its first branded mobile phone in the country in June 2001. By 2003, the company had sold five million of its phones that year in China. By number of mobile phones sold there that year, DBTEL was ranked number six in
tier-one and tier-two cities and number four in other cities. With 85% of its revenue in China, DBTEL caused observers to worry that it was too reliant on the country. After the company faced competition from
Motorola
Motorola, Inc. () was an American Multinational corporation, multinational telecommunications company based in Schaumburg, Illinois, United States. After having lost $4.3 billion from 2007 to 2009, the company split into two independent p ...
,
Nokia
Nokia Corporation (natively Nokia Oyj, referred to as Nokia) is a Finnish multinational corporation, multinational telecommunications industry, telecommunications, technology company, information technology, and consumer electronics corporatio ...
, and
Samsung
The Samsung Group (or simply Samsung) ( ko, 삼성 ) is a South Korean multinational manufacturing conglomerate headquartered in Samsung Town, Seoul, South Korea. It comprises numerous affiliated businesses, most of them united under the ...
in China and began running increasingly large deficits, it returned to making OEM sales in addition to selling its owned branded projects. DBTEL lost even more money after Taiwanese mobile phone competitors
BenQ
BenQ Corporation (; ) is a Taiwanese multinational company that sells and markets technology products, consumer electronics, computing and communications devices under the "BenQ" brand name, which stands for the company slogan ''Bringing Enj ...
, , and
MiTAC Holdings
MiTAC Holdings Corporation, through its subsidiaries ( MiTAC International Corp. and MiTAC Computing Technology), provides GPS navigation devices, automotive solution, cloud services and cloud computing products worldwide. The company offers a ran ...
all received the Chinese domestic sales rights in 2005. Analysts criticised DBTEL for repeatedly cutting back their financial forecasts which made investors lose their trust in the company.
In September 2005, the and other government agencies launched an investigation into
insider trading
Insider trading is the trading of a public company's stock or other securities (such as bonds or stock options) based on material, nonpublic information about the company. In various countries, some kinds of trading based on insider information ...
at DBTEL. The investigators alleged that DBTEL had several times sold large amounts of shares before disclosing negative news that caused the stock prices to drop. The company's chairman was acquitted in one trial and convicted in a second one, with DBTEL changing its Chinese name after the controversy. In 2020, DBTEL applied to end the
over-the-counter
Over-the-counter (OTC) drugs are medicines sold directly to a consumer without a requirement for a prescription from a healthcare professional, as opposed to prescription drugs, which may be supplied only to consumers possessing a valid prescr ...
trading of its stock in November 2020 and acquired outstanding shares.
History
Early history
DBTEL was founded in 1979 by Michael Mou () with a focus on making
telephony
Telephony ( ) is the field of technology involving the development, application, and deployment of telecommunication services for the purpose of electronic transmission of voice, fax, or data, between distant parties. The history of telephony is i ...
products for other companies.
At its beginning, the company did research on making
cordless telephone
A cordless telephone or portable telephone has a portable telephone handset that connects by radio to a base station connected to the public telephone network. The operational range is limited, usually to the same building or within some short ...
s.
Beginning in the 1990s, DBTEL did research into how to produce mobile phones.
DBTEL once took up 30% of the
original equipment manufacturer
An original equipment manufacturer (OEM) is generally perceived as a company that produces non-aftermarket parts and equipment that may be marketed by another manufacturer. It is a common industry term recognized and used by many professional or ...
(OEM) market share for United States cordless phones in the 1990s.
It began investing in China in 1994 to increase its production capacity and decrease the production cost.
DBTEL was a supplier for
Lexmark International
Lexmark International, Inc. is a privately held American company that manufactures laser printers and imaging products. The company is headquartered in Lexington, Kentucky. Since 2016 it has been jointly owned by a consortium of three multination ...
's Lexmark 5700 colour printer.
Lexmark sued DBTEL in 1998 for allegedly leading Lexmark to incorrectly believe it could take care of design adjustments since it had the engineering acumen and manufacturing volume.
The delay, Lexmark asserted in a US federal court lawsuit, led to the printer's not being shipped to consumers for months over the deadline.
Owing its long-term research into high-frequency cordless telephones, DBTEL was able to manufacture products that met the
GSM
The Global System for Mobile Communications (GSM) is a standard developed by the European Telecommunications Standards Institute (ETSI) to describe the protocols for second-generation ( 2G) digital cellular networks used by mobile devices such as ...
standard in 1998.
As DBTEL was facing headwinds from the decreasing profits for making cordless telephones, founder Michael Mou had to find a new way for the company to grow.
Motorola at that time needed to find a manufacturer to reduce its production costs, so in 1998 the two companies signed an agreement.
DBTEL began making GSM phones for Motorola and began producing phones for
Siemens
Siemens AG ( ) is a German multinational conglomerate corporation and the largest industrial manufacturing company in Europe headquartered in Munich with branch offices abroad.
The principal divisions of the corporation are ''Industry'', '' ...
,
Alcatel Mobile
Alcatel (formerly Alcatel Mobile Phones and Alcatel OneTouch) (previously ALCATEL) is a French brand of mobile handsets owned by Finnish consumer electronics company Nokia and used under license by Chinese electronics company TCL Technology. Th ...
, and other companies in the world.
In 1999, DBTEL released its inaugural cell phone after having produced cordless telephones for numerous years.
In a first for Taiwanese cell phone producers, it secured China's authorisation in 2000 to market branded cell phones in the country.
DBTEL used to be
Motorola
Motorola, Inc. () was an American Multinational corporation, multinational telecommunications company based in Schaumburg, Illinois, United States. After having lost $4.3 billion from 2007 to 2009, the company split into two independent p ...
's largest manufacturer.
When the mobile phone market experienced weakness in 2000, Motorola responded by cutting its requests for DBTEL and instead built the phones in their own factories.
DBTEL experienced a revenue decline and began losing money.
By 2001, the two companies' relationship deteriorated further.
DBTEL was forced to stop production after not receiving any orders from Motorola for four months.
After facing numerous challenges, DBTEL, which had unstable
original equipment manufacturer
An original equipment manufacturer (OEM) is generally perceived as a company that produces non-aftermarket parts and equipment that may be marketed by another manufacturer. It is a common industry term recognized and used by many professional or ...
(OEM) sales, transformed from an OEM company into selling its own brand.
In June 2001, it released a branded mobile phone, its first foray into China as its own brand called "Dí Bǐ Tè" ().
In November 2001, it released a branded mobile phone in Taiwan called "DBTEL".
Motorola filed a lawsuit against DBTEL in 2002 accusing it of divulging
trade secret
Trade secrets are a type of intellectual property that includes formulas, practices, processes, designs, instruments, patterns, or compilations of information that have inherent economic value because they are not generally known or readily asc ...
s and the company's contract ended that year.
After DBTEL's Motorola contract ended in April 2002,
both the company's stock price and
employee morale
Employee morale or workspace morale is the morale of employees in workspace environment. It is proven to have a direct effect on productivity.
History
Long used by the military as a "mission-critical" measure of the psychological readiness of tr ...
dropped.
said in 2002 that DBTEL was widely considered to be like
The Boy Who Cried Wolf
The Boy Who Cried Wolf is one of Aesop's Fables, numbered 210 in the Perry Index. From it is derived the English idiom "to cry wolf", defined as "to give a false alarm" in e''Brewer's Dictionary of Phrase and Fable'' and glossed by the ''Oxford E ...
in its repeated cutbacks of its financial outlook in four of the past six years.
Struggles leading to operating losses
In 2002's first six months, over 1.6million DBTEL cell phones were purchased.
5% of the
cell phone
A mobile phone, cellular phone, cell phone, cellphone, handphone, hand phone or pocket phone, sometimes shortened to simply mobile, cell, or just phone, is a portable telephone that can make and receive calls over a radio frequency link whil ...
market in China was captured by DBTEL's brand in 2002.
Its phone lacked
General Packet Radio Service
General Packet Radio Service (GPRS) is a packet oriented mobile data standard on the 2G and 3G cellular communication network's global system for mobile communications (GSM). GPRS was established by European Telecommunications Standards Inst ...
which ''
The Wall Street Journal
''The Wall Street Journal'' is an American business-focused, international daily newspaper based in New York City, with international editions also available in Chinese and Japanese. The ''Journal'', along with its Asian editions, is published ...
'' said could dissuade
radio operator
A radio operator (also, formerly, wireless operator in British and Commonwealth English) is a person who is responsible for the operations of a radio system. The profession of radio operator has become largely obsolete with the automation of ra ...
s from adopting DBTEL's technology.
In 2002, DBTEL released two phones, which the ''
Financial Times
The ''Financial Times'' (''FT'') is a British daily newspaper printed in broadsheet and published digitally that focuses on business and economic current affairs. Based in London, England, the paper is owned by a Japanese holding company, Nik ...
'' described as "a colour-screen model and one claimed to be the smallest 'clam-shell' phone in the world".
DBTEL released diamond-studded cell phones in 2003 in the colours of black, gold, red, and white and bearing names like Venus, Elf, and Allure.
Whereas the least expensive diamond phone cost (US$), the most expensive three-carat one retailed for (US$).
The company sold 90% of its phones in China and the remainder in Taiwan and Southeast Asia in 2004.
DBTEL aimed to overtake
Nokia
Nokia Corporation (natively Nokia Oyj, referred to as Nokia) is a Finnish multinational corporation, multinational telecommunications industry, telecommunications, technology company, information technology, and consumer electronics corporatio ...
which ranked first in the world in mobile phone sales after it achieved strong results in mainland China at the beginning.
The company used Taiwanese actress
Stephanie Shiao
Stephanie Shiao (; born 13 August 1968) is a Taiwanese actress, model, singer and writer.
Early life and education
Shiao was born Shiao Xiuxia () in Yonghe District of New Taipei City, Taiwan, on August 13, 1968, while her ancestral home in Hez ...
, Hong Kong singer
Sammi Cheng
Sammi Cheng Sau-man (; born 19 August 1972) is a Hong Kong singer and actress. She is considered one of the most prominent female singers in Hong Kong, with album sales of over million copies throughout Asia. Most notably in the 1990s, she was dub ...
, and Indian actress
Reema Sen
Reema Sen (born 29 October 1981) is an Indian actress and model who primarily appeared in Bengali theatre films, Tamil, Telugu, and Hindi films.
Early life and education
Sen was born in Kolkata on 29 October 1981. She completed high school fro ...
to promote its products and opened its flagship store on
Fuxing Road in Taipei.
DBTEL established its Chinese headquarters in the where it continued doing research and development and began marketing teams.
Through a strong stock market performance, DBTEL was able to accumulate more money to grow its business in China.
In 2003, the company sold fivemillion of its phones in China that year and achieved a
gross margin
Gross margin is the difference between revenue and cost of goods sold (COGS), divided by revenue. Gross margin is expressed as a percentage. Generally, it is calculated as the selling price of an item, less the cost of goods sold (e. g. production ...
of 25%.
By number of mobile phones sold in China that year, DBTEL was ranked number six in
tier-one and tier-two cities and number four in other cities.
With 85% of its revenue from China, the company had a profit of (US$) in 2003.
Observers became concerned that owing to its deep reliance on China's volatile economy, DBTEL would be unable to continue making money.
The company experienced challenges in the Chinese market with mobile phone prices quickly falling and competition increasing.
It released a new phone brand called "Dbtel International" to compete against Nokia and
Samsung Electronics
Samsung Electronics Co., Ltd. (, sometimes shortened to SEC and stylized as SΛMSUNG) is a South Korean multinational corporation, multinational electronics corporation headquartered in Yeongtong-gu, Suwon, South Korea. It is the pinnacle of ...
.
In 2004, owing to competition from Motorola, Nokia, and Samsung which were focusing more heavily and China, and its own unsuccessful attempts, DBTEL lost (US$).
After facing challenges with selling its own branded products, DBTEL returned to making
original equipment manufacturer
An original equipment manufacturer (OEM) is generally perceived as a company that produces non-aftermarket parts and equipment that may be marketed by another manufacturer. It is a common industry term recognized and used by many professional or ...
(OEM) sales in a dual-pronged approach of having both branded and OEM sales.
It continued to be battered by the market through competition from
parallel import
A parallel import is a non-counterfeit product imported from another country without the permission of the intellectual property owner. Parallel imports are often referred to as grey product and are implicated in issues of international trade, a ...
s and
white-label product
A white-label product is a product or service produced by one company (the producer) that other companies (the marketers) rebrand to make it appear as if they had made it.
The name derives from the image of a white label on the packaging that ca ...
s, losing (US$) in the first half of 2004.
Before 2005, the company had been the only Taiwanese firm with domestic sales rights in China.
In May of that year,
BenQ
BenQ Corporation (; ) is a Taiwanese multinational company that sells and markets technology products, consumer electronics, computing and communications devices under the "BenQ" brand name, which stands for the company slogan ''Bringing Enj ...
and received the Chinese domestic sales rights, while
MiTAC Holdings
MiTAC Holdings Corporation, through its subsidiaries ( MiTAC International Corp. and MiTAC Computing Technology), provides GPS navigation devices, automotive solution, cloud services and cloud computing products worldwide. The company offers a ran ...
received the rights in September.
Several mergers and acquisitions that year, which included separate activity from
Foxconn
Hon Hai Precision Industry Co., Ltd., trading as Hon Hai Technology Group in China and Taiwan and Foxconn internationally, is a Taiwanese multinational electronics contract manufacturer established in 1974 with headquarters in Tucheng, New T ...
and
Siemens
Siemens AG ( ) is a German multinational conglomerate corporation and the largest industrial manufacturing company in Europe headquartered in Munich with branch offices abroad.
The principal divisions of the corporation are ''Industry'', '' ...
, led to increased competition in the OEM and
original design manufacturer
An original design manufacturer is a company that designs and manufactures a product that is eventually rebranded by another firm for sale. Such companies allow the firm that owns or licenses the brand to produce products while having to engage in ...
(ODM) arenas.
The increased competition exacerbated DBTEL's troubles.
In a June 2005 meeting, Michael Mou proposed splitting the company into three to try to attract people into investing.
In the first three quarters of 2005, the company had a loss of (US$).
Most of the loss was from the company's Shanghai subsidiary, Shanghai DBTEL, which had been established in 1993.
DBTEL shrank its presence in China: It once had 27 branches and 10,000 employees there but was down to nine branches and 2,000 employees in 2005.
Beginning in September 2005, DBTEL announced it would cease injecting money into DBTEL Shanghai so that the subsidiary would no longer cause monetary damage to the parent company.
In the midst of experiencing deep monetary troubles, Shanghai DBTEL for three months failed to compensate suppliers.
Travelling to Shanghai, the company's debtees asked to be paid.
Later history
The company planned to build a 20,000-ping (66,100m
2) headquarters at but had to decrease its area by half following the failure of an attempted (US$) selling of shares.
After uncovering unusual DBTEL stock trading happening, several government departments led by the collaborated on conducting an investigation into
insider trading
Insider trading is the trading of a public company's stock or other securities (such as bonds or stock options) based on material, nonpublic information about the company. In various countries, some kinds of trading based on insider information ...
.
At the end of September 2005, prosecutors began an
insider trading
Insider trading is the trading of a public company's stock or other securities (such as bonds or stock options) based on material, nonpublic information about the company. In various countries, some kinds of trading based on insider information ...
inquiry regarding two company executives: Michael Mou, the company's chairman, and Kuo Pei-chih, its president and Mou's wife.
Investigators said DBTEL had revealed to the public that it had experienced losses and was adjusting its financial outlook down right after selling many shares of its stock.
The company was accused of funnelling funds they had obtained through
shorting
In finance, being short in an asset means investing in such a way that the investor will profit if the value of the asset falls. This is the opposite of a more conventional "long" position, where the investor will profit if the value of the a ...
company shares to subsidiary companies including to its Shanghai subsidiary.
The company denied the allegations.
An analyst at SinoPac Securities Corporation criticised DBTEL, stating, "We haven't covered Dbtel for a long period of time and we have no plan to put the stock on our investment list. Untrustworthy financial forecasts have upset investors' stomachs."
After the announcement of the inside trading investigation, ''Moneyweekly'' said, "In fact, looking at the ups and downs of the mobile phone industry, the biggest crisis DBTEL faces is not just emptying the cloud of doubts, but the bigger crisis will be the battle of life and death for the division of labor in the mobile phone industry. If DBTEL can no longer play its core role or is unable to successfully create their own brand, I am afraid that they face a more serious crisis of being eliminated."
''Business Next'' noted in 2004 that the company had to repeatedly curtail its financial projections.
Prosecutors prevented company chairman Michael Mou from leaving Taiwan for a decade.
He was acquitted in one insider trading trial but was convicted in a second trial.
DBTEL changed its Chinese name from Dàbà Diànzǐ () to Dǐng Chuàng Dá () after the 2005 launch of the insider trading investigation.
Mou was president of the company in 2014.
DBTEL applied to end the
over-the-counter
Over-the-counter (OTC) drugs are medicines sold directly to a consumer without a requirement for a prescription from a healthcare professional, as opposed to prescription drugs, which may be supplied only to consumers possessing a valid prescr ...
trading of its stock in November 2020 and acquired outstanding shares.
Taipei Exchange
Taipei Exchange (), formerly the Gre Tai Securities Market (GTSM), is a foundation which is organized for serving the over-the-counter (OTC) market and bond trading of Taiwan. It was formally founded on 1 November 1994. The initial fund of the foun ...
approved the application.
See also
*
List of companies of Taiwan
Taiwan maintains a stable industrial economy as a result of economic growth and industrialization during the late 20th century, being dubbed as one of the Four Asian Tigers along with Hong Kong, Singapore and South Korea. It is a member of both ...
References
Further reading
*
External links
*
* {{in lang, zh
1979 establishments in Taiwan
Companies based in Taipei
Electronics companies established in 1979
Electronics companies of Taiwan
Mobile phone manufacturers
Taiwanese brands
Telecommunications companies of Taiwan