With Foxconn’s Help, Sharp is Poised to Re-enter Abandoned Tech Markets
A deal between Sharp and Toshiba will see the former purchase the latter’s PC business in a stock exchange valued at roughly $36 million. The low value of the deal may speak volumes about the current state of the personal computing market, but there’s a separate narrative that really needs to be talked about as well. And that’s the one about how Sharp is once again on stable ground nearly two years after being acquired by Apple supplier Foxconn.
For Foxconn, the decision to snatch up the floundering Osaka-based electronics manufacturer was seen at the time as a way for it to diversify itself. So much of its revenue is tied up in producing components for iPhones to the point that any downturn for that product could be seen as catastrophic for the company. Acquiring Sharp for $3.5 billion in August 2016 allowed the company to put itself into different tech markets in a way that was relatively low cost but had major upside.
And that upside is really starting to present itself.
In just the past year, Foxconn has helped Sharp in acquiring other tech companies, placing the brand on firmer footing and bringing it back into markets that it had once abandoned.
In acquiring a more than 80 percent stake in Toshiba’s PC business, Sharp appears ready re-enter a market that it gave up on almost eight years ago. Its relationship with Foxconn, which is a contract PC manufacturer, could allow the company, according to reports, to manufacture devices at a lower price.
If it does decide to get back into the PC game, this wouldn’t be the first market that Sharp reintroduces itself into. Just last year, the company worked with Foxconn to acquire two television companies in the European market. Since then, we’ve seen the slow rollout of the world’s first 8K TV. Sharp was at the IFA Global Press Conference earlier this year to announce the European rollout of that TV.
There’s no word as of yet whether the company is looking to bring their video tech a little further west, but Reuters did note that the company is looking to get the license of the Sharp brand for TVs in North America back from China’s Hisense Group. Hisense purchased the license in 2015 for a little less than $28 million. The two companies had been entangled in a mess of lawsuits over the sale of that license. In 2017, Sharp accused Hisense of selling “shoddily manufactured” TVs under the Sharp name. Those lawsuits have since been dropped.
If the company fails to secure the Sharp TV license, it would likely be forced to relaunch its North American TVs under a series of new brand names.
That said, the thought of Sharp launching anything new in the U.S. in either of these categories just a few years ago, prior to the Foxconn acquisition, would’ve been crazy. Now, though, the company has the support structure and, perhaps more importantly, the financial backing in place to begin attacking those markets once again. It ends up being a win-win for Foxconn and Sharp, allowing the former to diversify its portfolio and the latter to get back to producing electronics in the categories that helped it become a household name.