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Businesses Displays Japan The Almighty Buck

Sharp Warns That It Might Collapse 284

Posted by timothy
from the so-business-is-soft dept.
angry tapir writes "Japan's Sharp, a major supplier of LCD displays to Apple and other manufacturers, has warned that it may not survive if it can't turn around its business. The Osaka-based manufacturer said there is "material doubt" about its ability to continue operating in its earnings report filed Thursday. Sharp added, however, that it still believes it can cut costs and secure enough credit to survive. Its IGZO technology for mobile displays is likely to be a key element of its business strategy."
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Sharp Warns That It Might Collapse

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  • by Anonymous Coward on Sunday November 04, 2012 @11:04PM (#41876901)
    Sell their LCD's to apple at a higher cost why should apple be the only one making a premium off the screens?
    • by Anonymous Coward on Sunday November 04, 2012 @11:15PM (#41876963)

      because then Apple tells them to get bent, buys all their displays from someone else and Sharp goes under instantly.

      • by Anonymous Coward on Sunday November 04, 2012 @11:22PM (#41877003)

        What does anyone really expect when SHARP sells BS products like the Sharp IG-BC2UB High Density Plasmacluster Ion Generator for Car Use [amazon.com]?

        What does that even mean?

        • Re: (Score:3, Insightful)

          by isopropanol (1936936)

          It's an air filter. Negative ions in the air make smoke particles stick to the (positively charged) filter better. They work better than filters with no ion generator, but not anywhere near as good as not smoking in the first place.

          • by Anonymous Coward on Monday November 05, 2012 @12:12AM (#41877267)

            Ionizers literally drove The Sharper Image into bankruptcy. The Sharper Image produced the Ionic Breeze ionizer which Consumer Reports concluded [quackwatch.org] was "ineffective" as an air cleaner and produced "almost no measurable reduction in airborne particles."

            Worse, all ionizing purifiers generate ozone. The EPA states [epa.gov], "Relatively low amounts [of ozone] can cause chest pain, coughing, shortness of breath, and, throat irritation. Ozone may also worsen chronic respiratory diseases such as asthma and compromise the ability of the body to fight respiratory infections".

            So in reality not only are ionizers ineffective, they're actually bad for you.

        • by AmiMoJo (196126) * <mojo AT world3 DOT net> on Monday November 05, 2012 @08:44AM (#41879273) Homepage

          I own one, as well as a few other Plasmacluster devices.

          They are basically air purifiers that use a combination of filters and ion generation. Unlike older ion generators they don't produce ozone. The ions cause airborne particles to either fall to the ground or be neutralized (e.g. mould is killed).

          I use them to help control my allergies. They were really bad, especially at work. I find that the Plasmacluster on my desk, the one you linked to that I keep in my car and the two I have at home do reduce the symptoms quite a bit. Combined with medication I can breath more or less normally now. I tried Panasonic's Nanoe devices but didn't find them to be as effective.

          That sort of product is extremely popular in Japan, where several manufacturers have large ranges. Sharp went a bit nuts with theirs, adding ion generators to things like vacuum cleaners and washing machines. They do definitely work though - NHK did a test where they tested various product's ability to kill mould and found that some were quite effective.

          The only real down side is that they need humidity to work, generally 50% or more. Newer models often have a water tank so that they can humidify the environment up to around 60%.

      • by ne0n (884282) on Monday November 05, 2012 @01:11AM (#41877539) Homepage
        The problem, from Apple's perspective, is that Samsung is the only viable producer of top-quality displays. Only Samsung and LG can produce the volume necessary, and Samsung is openly hostile now that Apple's been trying to bend them over one too many times. So now they're stuck with crap SSDs (Toshiba) and crap IPS panels (LG) unless they pull a rabbit out of the hat. Keeping Sharp afloat with purchasing agreements would be the Microsoft move (a la the investment in Apple, early 90's) but Apple is more likely to buy Sharp and try to keep the entire supply chain in-house. It would take years for this one to bear fruit but, hasn't Apple been patient before? And they've got the cash to build out in a hurry.
        • by Jafafa Hots (580169) on Monday November 05, 2012 @03:02AM (#41877971) Homepage Journal

          Why would Apple want to go into the messy business of actually building hardware again?

          You can't charge a repeating fee for hardware.

        • by Chrisq (894406) on Monday November 05, 2012 @06:55AM (#41878827)

          Apple is more likely to buy Sharp and try to keep the entire supply chain in-house.

          But a "Sharp Apple" could leave a bitter taste

      • There aren't that many places to buy high quality LCD displays in volume and Apple just burnt its bridges with Samsung. I say, with Sharp teetering (no doubt in part because of Apple stinginess) LG is in an excellent position to raise prices.

      • by c0lo (1497653)

        because then Apple... buys all their displays from someone else

        Like who? Samsung?

        • by MrDoh! (71235)
          In the world of busines... Maybe. Knowing how desperate they are is a great route to provide screens, with the proviso that they drop all this silly patent shenanigans. Then Samsung wins either way. Though Sharp IS in a bad situation at this time, this could all be posturing for the Apple TV manufacturing. If Apple's reliant on Sharp to produce them (if they are real), then this would be the time to ask Apple for a great wodge of cash to prop them up, as Sharp too would know that Apple would hate to go b
      • by Anonymous Coward on Monday November 05, 2012 @04:15AM (#41878215)

        because then Apple tells them to get bent, buys all their displays from someone else and Sharp goes under instantly.

        An electronics manufacturer I talked to was in a similar situation where a large customer pretty much said that they wanted things made cheaper or they would take their business elsewhere. Instead of shitting his pants he went over the numbers and regrettably informed the customer that he couldn't build things at the price they demanded. A few month later they got back and accepted his original price.

        Moral of the story?
        If you can't produce at the demanded price then chances are that your competition can't either.
        The customer is only right as long as he is willing to pay, if he doesn't want to pay he is no customer and you should spend your time on those who appreciate your services.

        • by GNious (953874)

          I'd love to see that in the Automotive sector.

          OEMs go to the suppliers yearly, demanding a (often contractual) reduction in price by 1-2% ... whether the suppliers are able to supply the parts at the lower cost is irrelevant, and most will gladly bend over in fear of not loosing the next deal (which they'll likely also lose money on).

          • Perhaps they think they'll make it up on volume?

          • OEMs go to the suppliers yearly, demanding a (often contractual) reduction in price by 1-2% ... whether the suppliers are able to supply the parts at the lower cost is irrelevant, and most will gladly bend over in fear of not loosing the next deal (which they'll likely also lose money on).

            Actually what happens is that the lower tier suppliers price in future price reductions knowing that the OEMS will demand price reductions in future years. The suppliers aren't stupid so they price that in up front. Occasionally someone is dumb enough to not take this into account and they lose their a$$ on the job and aren't a factor the next time around. I'm a cost accountant and deal with this all the time. You pretty much have to assume between 1% and 5% give backs (amount depends on the customer) w

    • by dimeglio (456244)

      Maybe it's volume? Sharp probably bid for Apple's business like others did. Selling it for more would mean no business at all.

      • Re: (Score:3, Informative)

        by alexander_686 (957440)

        It’s not volume – it is overcapacity. LCD manufacturing has high fixed costs – that is it is a capital intensive business.

        A few years ago everybody built fab plants – and then the economy turned south so people stopped buying large screen TVs. (oversimplied, but.)

        So, when there is overproduction one has 2 choices – mothball the entire plant (complete loss) or engage in a brutal wall of price cuts and attrition. The logical choice is price cuts and attrition (well, the logical c

        • Yup, Sharp built the world's largest in Japan, which started operations in October of 2009, and Sharp is already considering selling it because it sits mostly idle.....
      • by symbolset (646467) *
        Now that Samsung needs their own display output there is no other display vendor but Sharp Apple can turn to who can produce the quality of displays Apple needs in the appropriate volume. This will only get worse as other vendors' Android tablets, TVs and Chromebooks compete for this constrained supply. The only appropriate response for Sharp is to increase their prices to Apple and others to all the market will bear. This turns into a huge win for Sharp.
    • by Anonymous Coward

      Part of Sharp's problem's are twofold. Their investment in R&D accounts for a lot of their debt. And of course Japans overall problem with the Yen.

    • You can't solve financial problems by raising prices. You have charge prices similar to what others are charging or else you will just lose all your business. You have to look at what's driving your costs and figure out if you can reduce them enough to stay afloat, or if you need to be rethinking your business plan.

      • by Luckyo (1726890)

        You can charge more when there's a shortage on the market. But there isn't one now, unlike people are implying. There may be on in the future as there are basically three large scale LCD panel manufacturers in the world, Samsung, LG and Sharp. If apple really does manage to get itself banned from purchasing from Samsung, LG and Sharp may be able to increase prices on their hardware sold to apple due to less competition and possible shortage with increase in sales from other competing products.

        That said, thi

      • You can't solve financial problems by raising prices.

        You can if you have a monopoly. As far as I can tell, there's only two players in the high end, high volume LCD business, and one of those is at war with Apple. That leaves Apple with only one choice of supplier.

  • by bogaboga (793279) on Sunday November 04, 2012 @11:07PM (#41876911)

    This would be an opportune time for Apple to buy Sharp, re-organize the beast then ramp up displays and other parts for its booming business. If Sharp collapses, Apple will be in trouble - guaranteed.

    • by rtb61 (674572) on Sunday November 04, 2012 @11:22PM (#41877007) Homepage

      Apple can not buy sharp because Apple's profit margins are way to high, buying Sharp will kill those margins and Apples share price along with it. The problem with Sharp is it kept narrowing down their product base and made itself very vulnerable to fluctuations in sales in it's remaining markets, hence the current problem. It will likely be fine in a few years, still no where near profitable enough for Apple to buy.

      Basically they have put themselves up for sale for their manufacturing facilities as a merger with a more solvent and complete electronics company. Optimum partner would be of course Panasonic who invested heavily in unmarketable plasma screens and needs to shift to LCD.

      • It doesn't matter if profit margins go down, as long as profits go up at the same time. Adding another profit base to your business isn't bad just because your margins go down.
        • Re: (Score:3, Insightful)

          by MangoCats (2757129)

          It doesn't matter if profit margins go down, as long as profits go up at the same time. Adding another profit base to your business isn't bad just because your margins go down.

          You are speaking rationally... perception is what matters in stock valuations, especially a stock as widely held by "enthusiast investors" as AAPL. Part of the valuation perception in AAPL is the unusually high profit margin, merge them with a nice profitable entity like Archer Daniels Midland and it will muck up that crystal clear picture of what makes AAPL such a desirable stock to hold.

          • It doesn't matter if profit margins go down, as long as profits go up at the same time. Adding another profit base to your business isn't bad just because your margins go down.

            You are speaking rationally... perception is what matters in stock valuations, especially a stock as widely held by "enthusiast investors" as AAPL. Part of the valuation perception in AAPL is the unusually high profit margin, merge them with a nice profitable entity like Archer Daniels Midland and it will muck up that crystal clear picture of what makes AAPL such a desirable stock to hold.

            Apple could always acquire Sharp through a subsidiary company. That way Apple's profit margins (and hence, stock price) are firewalled from Sharp.

          • All else being equal, If you've got 1 billion in the bank, and you get 15% letting it sit there, or by acquiring a company that returns 15%, but instead use it to acquire a new business that returns 7% you just threw away 80Million in year one, and that just compounds over time.

            So yes, adding another profit base to your business can easily be quite a terrible idea.

            Of course if the company in question is a major supplier of yours, it is entirely possible that all things are not in fact equal.

          • perception is what matters in stock valuations, especially a stock as widely held by "enthusiast investors" as AAPL

            Are those the same "enthusiast investors" who drove AAPL down $120 in the seven weeks since the iPhone 5 introduction?

        • by rtb61 (674572)

          The share market lives on profit margins, that's just the way it is, end of story. Companies routinely dump less profitable portions of the business empire to increase profitability and share prices.

      • by isopropanol (1936936) on Sunday November 04, 2012 @11:34PM (#41877073) Journal

        Vertically integrating one of your main suppliers would probably not reduce profit margins as much as stopping production because you can't get parts.

      • Apple has easily 10 times that in cash on hand and a quarterly profit of 8 billion. If Apple wanted Sharp, the only thing blocking it would be japanese or american regulators. In reality a middle company like Foxconn or one of apples other suppliers would make a better fit.

        • by symbolset (646467) *
          If only it were that easy. A number of patent cross-licenses and other contracts go void in the event of a change in control. That's why nobody has bought AMD yet.
    • by StormReaver (59959) on Sunday November 04, 2012 @11:55PM (#41877175)

      This would be an opportune time for Apple to buy Sharp....

      This would be an even more opportune time for Samsung to buy Sharp.

      • I doubt that would happen, historically the Japanese and Koreans haven't exactly been bff....
        • I doubt that would happen, historically the Japanese and Koreans haven't exactly been bff....

          Oh how true, whereas America and Japan have always been best buddies, I totally get your point.

          • Re: (Score:3, Informative)

            by antifoidulus (807088)
            Do you seriously know any history or are you just mouthing off because you somehow think it makes you sound smarter? You are aware that opposed to a 4 1/2 year war, Japan brutally occupied Korea, raping women(and not apologizing for it), stole massive amounts of resources, almost caused near famine towards the end of the war when they started shipping all the rice out of the country to Japan etc. Not to mention continued territorial disputes and a historical animosity that goes back millennia.

            But yeah,
            • Just like say Japan did to the European colonies and Germany did to almost all of Europe?

              There is indeed lingering resentment and the Japanese indeed did not apologize or pay damages unlike the Germans but to think this matters on a high level unless it is convenient (when either side needs to divert attention from internal problems) is childish.

              The higher-ups have no morals, they are perfectly willing to deal with former enemies often before the last victims have stopped twitching. See McArthur and the reb

    • by dimeglio (456244)

      Sharp produces commodities. There is no profit in commodities. Apple is unlikely to buy Sharp. It will continue to buy small innovative companies like Siri.

    • This would be an opportune time for Apple to buy Sharp, re-organize the beast then ramp up displays and other parts for its booming business. If Sharp collapses, Apple will be in trouble - guaranteed.

      Why? Let some other electronics manufacturer buy Sharp, reorganize and dump non-proitable lines. and then buy displays from them. Apple doesn't care what name is on the display as long as they can get the desired quality at the right price. They do not need the distraction of reorganizing a company and the political fallout from laying off staff; what they can do is ensure they have a significant order for Sharp displays to make that part of Sharp worth saving, assuming they need the displays.

    • Apple doesn't buy large companies. And there's a good reason, Apple's management doesn't need to be worrying about restructuring and turning around a failing Flat-Panel display manufacturer. They've got enough to worry about just designing and selling their products.

      But, Apple has been known to invest in companies in order to ramp up and modernize production. It's not too big a step to go from that to bailing out a company with loans. Though It would probably be smarter for them to give the money to a compa

      • by Teun (17872)
        Apple doesn't need to invest in Sharp to keep it afloat, they only need to pay a reasonable price for Sharp displays.
    • by DarkOx (621550)

      That would destroy Apple. It would saddle them with a high fixed cost plant right at a time when their ability to push new iPad sales indefinitely is starting to look like there may be a question mark in there some place. They only thing worse for Apply than not getting the displays they need would be having or having production capacity for ones they don't.

      It would be better to have to source them elsewhere. The Koreans can crank then out as well AUO stuff might not be as dense but apple could make do

  • that's dull
  • by guises (2423402) on Sunday November 04, 2012 @11:53PM (#41877169)
    My impression of Sharp may be anachronistic, I don't know if the company is still what it used to be, but I think of them as manufacturing really terrific products, particularly portable electronics (remember these? [wikipedia.org]), but hardly selling them or anything at all outside of Japan. Even within Japan I guess their marketing wasn't so good. Sorta the anti-Apple - poor marketing, but great and often pretty open products.
    • by Tim99 (984437)
      Because I am nearly as old as dirt, I think of them making the Ever-Sharp mechanical pencil and electronic calculators during the 1960s-1970s.

      http://en.wikipedia.org/wiki/Sharp_Corporation [wikipedia.org]

    • Well a big part of the problem is that Sharp didn't anticipate the effect that smartphones would have on the portable electronic market.... They made some really cool gadgets but as smartphones continue to encroach on the functionality of these gadgets, many are questioning the wisdom of spending extra money and carrying extra gadgets when their smartphone can do 95+% of what said gadgets can do....
      And of course Sharp was really late to the game with Android smartphones, and their offerings(while having
  • by guttentag (313541) on Sunday November 04, 2012 @11:55PM (#41877177) Journal
    The #3 television manufacturer in the world, Sony, announced on Friday [ft.com] it's cutting its medium-term TV sales goals in half.

    Four days earlier, #5 Panasonic (Matsushita) announced [ft.com] it's cutting its flatscreen TV production in half.

    Sharp is ranked #4. Apparently all three of the Japanese manufacturers bet too big on TVs and are getting trounced by Korean rivals Samsung (#1) and LG (#2).
    • by v1 (525388)

      This is probably because a lot of consumers have figured out that the TV they have is fine and they don't need a new one. Since they just got done buying one recently, the manufacturers seem to think that the buying trend will just continue to climb. It's a bubble, and it's popping.

      There's just very little profit to be made selling TVs nowadays. Everyone that wanted a large TV *has* one by now, and there's nothing really that new that will encourage them to replace what they have. Prices have been drive

    • by RubberDogBone (851604) on Monday November 05, 2012 @01:01AM (#41877501)

      The Korean brands have a lot of awareness right now, thanks in part to Apple basically standing Samsung up and saying "we're scared of Samsung!" which really added both brand awareness and boosted their reputation -which was nothing to sneeze at anyway.

      Samsung has worked very hard to kill Sony. For a long time, that was their main mission: effing bury Sony. The only problem is that they've overshot the goal by making better products more or less across the board, and also that Sony has flopped in nearly every business unit. Samsung now sets the trends in phones and TVs, does very well with tablets, and has decent exposure in regular consumer electronics like pocket cameras and other items. Sony can only hope to follow. Aside from the PlayStation brand, Sony leads.... nowhere. In the future, Samsung is only going to become an even tougher company. They play to win. If iconic Japanese brands die along the way, that's absolutely fine with Samsung.

      LG, after changing their name, embarked on putting appliances in lots of homes. That's a great way to make entire families aware of your brand: it's the fridge, the washing machine, and also the TV. And it's a brand with great peer acceptance. Your neighbors know LG and probably think it's a fine brand.

      Both of these brands make good products for the most part. The neat part is that they both fight like hell to beat each other. So not only are they stomping on Panasonic and Sony, they are also trying to beat each other. This puts tremendous pressure on everybody else in the game. If you are Sony, you don't have one opponent or even two, you have closer to three or four because as much as Samsung and LG are bitter rivals, they have the same enemies and they will fight as one very tough force. If you are Sony, you don't just have to beat Samsung, you also have to beat LG AND you have to beat both of them combined which is intense enough to be its own entity.

      After them, the Japanese brands are kind of lumped in with the no-name Chinese brands. Panasonic and Sony can't easily compete on price with the likes of Vizio or Sceptre, or the new Chinese-licensed brands like JVC, Magnavox or Philips. China hasn't stopped their own brands but they have realized they can just license some old brand name like JVC, play off the name and market what would otherwise be a noname product as a brand product.

      TVs went through a phase where flat screens were a premium product, and at the high end yes they still are. But the low end is dominated by cheap TVs. Heck, you can get a 32-32" LCD TV at drug stores now, same as in the old days when a 12" B/W TV sold at drug stores. China will own that end of the market moving to the middle. Korea owns the top end -with Pioneer in for honorable mention on the high end. Everybody else needs to put on some knee pads and brace for impact. The middle market is going to get squeezed like an Oreo double-stuff left out in the sun.

    • That was last year. Still, I think that what are hurting them the most are the high prices of energy and the strong yen. The yen is around 20% more expensive than 2 years ago. No matter how much they try to restructure they can't offer competitive prices against Korean or Taiwanese offers.

  • Flat Panel TVs have become pretty cheap and with all the added functions and reliability, everybody who wants one or more may already have them. I have a Sharp Aquos which has an estimated 60,000 hours of liftetime. It's great, by the way. At 8 hours per day, that's about 20 years of use. And, as I said, everyone who wants or needs one or more of these things already has them, there's not much of a market. I've seen prices for 50 +" Samsungs or Sharps for $1,200 - $1,500 at Costco. It seems that Sony has al
    • by Comen (321331)

      I have two Sharp Aquos TV's a 65" and a 46" and both have been great TV's, it would be sad to see them fall I think.

  • by Anonymous Coward on Monday November 05, 2012 @12:55AM (#41877481)

    http://blogs.wsj.com/japanrealtime/2012/11/05/sharp-statement-lost-in-translation/?mod=WSJBlog

  • Sad (Score:5, Interesting)

    by drolli (522659) on Monday November 05, 2012 @02:30AM (#41877803) Journal

    Big Japanese mobile companies always take a long time to turn around if something happens. They all still don't understand why the iphone is successful since all the management level there was brought up in a time when NTT had a monopoly and the companies produced mobile phones nearly exclusively for NTT/docomo (imode), which in turn force fed the mobiles to the customers.

    I liked Sharps products, learned programming on a MZ-80B. I always wanted to buy a zaurus, one of the first linux-based PDAs, but it was mainly sold/available inside Japan. When i lived in Japanlater, i bought a sharp netwalker T1 (only available in Japan).

    The netwalker demonstrates all of Sharps shortcomings in a technically not so bad device:

    -Target the Japanese market only from the beginning

    -make no advertisements about the special features it has (e.g. standard usb host port, interesting pointing device layout)

    -make a half-assed decision of using Ubuntu on it (for *two* devices they used the ARM port of Ubuntu)

    -leave it unpolished, with easy to fix show-stopper bugs, trusting that the Japanese will always buy Sharp

    • by AmiMoJo (196126) *

      Big Japanese mobile companies always take a long time to turn around if something happens. They all still don't understand why the iphone is successful since all the management level there was brought up in a time when NTT had a monopoly and the companies produced mobile phones nearly exclusively for NTT/docomo (imode), which in turn force fed the mobiles to the customers.

      Japanese electronics companies are some of the most innovative and fastest changing in the world. The Japanese economy is build in the idea that every year they come out with new models that have new widgets that people buy even though their old one isn't broke.

      Japanese phones have had a lot of features that are only just coming to the west for years. Things like indoor navigation in underground railway stations, NFC payments, amazing camera stabilization, WiMax.

      Every Japanese electronics manufacturer's mot

  • I have fond memories of some really nice Sharp HiFi (Optonica) but despite being fairly ubiquitous in the market with a toe in pretty much all electronic/electric product areas, they did seem to shift from a 'High Street' brand to a parts supplier. As a result, they have dropped of most people's radar as a brand.
  • ...with the internets when I can read this article and appreciate the correct use of possessive in the form of its without the erroneous apostrophe.
  • Because right now SHARP tv's are the best you can buy. They are better quality than Anyone else and honestly far larger than anyone else. Where else can you pick up an 80" LED backlight LCD for under $3500.00

    LG is crap recently. their redesign has all plugs coming straight out the back.... DUH, no wall mounting unles you want a 3" gap.
    Panasonic is still plagued with failed power supply boards.
    Sony is overpriced rebranded LG.
    Samsung sets are junk. Just like how their projectors are junk. Control protoc

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