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Foxconn set to complete Sharp purchase?

The products that leave Foxconn’s factories are some of the most desirable in the world, yet the Chinese manufacturing giant has struggled to create a brand of its own. After years of pushing various ideas around without solid commitment, it looks like a strategy may have been set by Terry Gou, company president. KitGuru has a quick look around Hon Hai Precision Industry Company Limited to see what gives.

The world is full of ironies, like the idea of someone dying of thirst while in a boat in the middle of the ocean. Sharp has been a household brand for TVs and other AV equipment for many decades, but in a world that’s moving more and more toward putting a screen in/on/under everything – the Osaka based screen maker has been struggling.

On 28th March, it was announced that Sharp had been rescued by a cash injection from Foxconn of $1.6 billion. The news was so well received, that Sharp’s shares had to be suspended when they rose more than 15% almost instantaneously.

The source of the investor’s excitement was clear: Sharp makes screens and Foxconn makes Apple.

How any company can post a loss of more than $3 billion in a single year’s trading is hard to understand. Bear in mind that global brands, like jean make Levi, only turn over $4.4 billion in total.

At the time Foxconn’s involvement was announced, the plan was to sell around 10% of Sharp to the Chinese, but – less than month after the initial deal was put in place – it looks like the partnership may well turn into a full blown marriage.

Right now, specialists at both Sharp and Foxconn are modelling how the companies would look/work together if Foxconn was to take over full control, and we’re expecting to hear something about their long term strategic plans before the first runner takes to the track at the London Olympics (and the iPhone 5 launches).

Will the iPad 4 have a Samsung screen or will Apple look to distance itself from its nearest rival by opting for a Foxconn-owned panel?

Would Sharp be the sharp choice for iPad 4?

KitGuru says: Collapsing the supply chain is the most natural thing in the world. Roll the clock back 100 years and every part of Samsung may well have been a different company – all selling components to each other as outsiders. Bringing Sharp inside the ‘We love Apple’ fold at Foxconn would open up huge possibilities for the Japanese – and make losses of more than $3 billion a year a thing of the past.

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