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However, BenQ has come out and refuted the claims, and said the company "will not completely quit handsets and will still introduce new models in accordance with customer requests".

The report said that BenQ's handset shipments were up about 40 per cent in the second quarter to 40,000-50,000 units and of that amount, almost half supported 3G. The company's planned launch of a low-cost 3G handset, E55, is on track for July, the report also noted.

After exiting the China handset market, BenQ seems to be preparing a farewell for its global handset business as "production does not meet economies of scale, resulting in weak bargaining power with OEMs", the report said.

Fewer R&D resources have made the handset business very harsh for BenQ, especially with severe competition from rivals, the digitimes article reported.