Sharp Looks to Samsung as Apple Sales Sputter

By Steve Anderson May 14, 2013

Even just a year or two ago, the thought of Apple sales doing less than spectacularly might have been unthinkable, but Sharp, kicking off a three-year plan designed to ensure its own survival, has thought the unthinkable and is preparing a response, mostly geared toward increasing sales to Apple's major rival Samsung.

The business plan isn't just about boosting sales to Apple's competition; it's also about putting more faith in bank backing. A convertible bond valued at 200 billion yen—around $1.958 billion U.S.--is set to fall in September, according to a Reuters report. Sharp is set to not only release details of the plan, but also its full-year earnings, including forecasts expected to show operating profit around 52.9 billion yen, or roughly $517.67 million U.S, based on an average estimate from 13 analysts.

Sharp is shooting for an annual operating profit of 150 billion yen—around $1.48 billion U.S.—before March, 2016 comes around. Sharp plans to do this by upping the screens shipped to Samsung, but it will also be borrowing that same amount this year to help focus on short-term debt issues, giving lenders several senior management positions.

An ambitious target by any measure, and one that will be especially difficult to meet given that the Apple trade, making screens for iPads and iPhones alike, has started to fall off. Annual profit growth at Apple, according to analyst projections, is set to taper off to five percent per year over the course of the next ten years. That doesn't sound like a bad thing, until it's set against the average growth rate of the last five years, which averaged around 60 percent.

That means bad things for Sharp, who is expected to offer up a 500 billion yen net loss for the year ending March 31, mostly because it reportedly lost quite a bit of Apple business. But with Sharp and Samsung already having done some investment business together, Sharp routing more product to Samsung helps ensure that its lines continue rolling in earnestly.

Essentially, Sharp's plan makes sense. With demand softening for Apple goods, and thus the need for supplies to build said devices dropping with it, Sharps decision to look to other makers to keep the lines rolling and its supplies rolling out is a smart idea. With Sharp working with both Apple and Samsung—along with its line of televisions and similar consumer goods under its consumer-oriented business model—the end result should keep Sharp alive and functional for some time to come.

Naturally, only time will tell just how well this all works out, but overall it's a sound idea and Sharp should be reaping plenty of dividends—among them its own survival.




Edited by Blaise McNamee

Contributing TechZone360 Writer

SHARE THIS ARTICLE
Related Articles

Two Technologies That Showcase Good VR Could Cost $20K

By: Rob Enderle    6/23/2017

This month, there were two interesting product announcements. The first was in regard to very high-resolution displays that should arrive in VR headse…

Read More

Popularity of Voice Recognition Gadgets Highlights Need for Speech Analytics

By: Kayla Matthews    6/21/2017

Voice-activated personal assistant platforms such as Amazon's Alexa continue to grow in popularity, making lives easier in all sorts of ways. As such …

Read More

Can Machine Learning Defuse the Ticking Time Bomb of Open Recalls?

By: Special Guest    6/20/2017

Did you know that 150 million vehicles have been recalled in the USA since 2014? That's 38 percent of all the cars in America. And, according to Recal…

Read More

Technology and Ties: 5 Reasons Gen X is Taking Over in Business

By: Special Guest    6/20/2017

The generational clash in the workplace between Millennials and Baby Boomers gets all the hype. It reminds me of the debate over who would win - Muham…

Read More

For Amazon-Whole Foods' Future, Look to Zappos, Not Robots

By: Doug Mohney    6/19/2017

Amazon's bid for Whole Foods is obvious and brilliant. There's a lot of crazy talk about how Whole Foods will get turned into people-less stores like …

Read More