TV Prices Wobble As Sharp Moves To Grab Global Market Share
Sharp is set to renter the Australian TV market this year, according to sources in Hong Kong, only this time the Company intends to be a major player due in part to their volume manufacturing ability.
There is also concern that the move by Sharp to be a major play in the TV could push up the overall price of TV’s in Australia by third quarter of 2017.
Under the management of former Sharp Deputy Managing Director Joe Constantino, Sharp quit the Australian market ahead of the acquisition of Sharp by Foxconn Electronics with several observers claiming that the move was more about “poor management” than a problem with the Sharp brand or their TV’s.
This time round Sharp who is a leading manufacturer of TV display panels, via their Japanese based plants, which are described as being among the best in the world, is set to go after market share from both Samsung and Hisense.
In two key moves Sharp has forced Samsung to find a new supplier for their TV’s previously manufactured by Sharp, while also putting Hisense, who they currently have a brand licensing, relationship with in the US market, on notice that they intend to terminate the relationship as soon is legally possible.
Sharp also plans to invest US$7 Billion dollars building their own TV manufacturing plant in the USA.
Their Sakai plant is still the only 10th generation LCD manufacturing plant on the globe and is designed specifically for production of 60 inch or larger panels.
The move by Sharp to drop production of Samsung TV’s has seen Samsung switch manufacturing for some of their LED TV’s which are sold in Australia to BOE the Chinese Government owned display manufacturing Company.
Observers claim that the moves by Foxconn to re-establish the Sharp brand will result in the cost of TV’s going up.
The complete halt of LCD supplies from Sharp will create a supply shortage of 4 million panels per year for Samsung, a gap that could impact the Korean Company who are the #1 TV brand in Australia claims observers.
The acquisition of the Sharp brand by Foxconn has also seen changes in their TV market strategies with the Company now getting “extremely aggressive” in their attempts to impact other TV brands.
The group will initially shutdown Foxconn’s TV brand Infocus and prioritize all its resources on building up Sharp’s TV brands, volume and market.
In 2017, Foxconn has set a shipment volume target of 20 million Sharp TV sets, nearly five times the shipment volume of the 4 million sets in 2016.
To meet Foxconn’s ambitious 2017 shipment volume target, the key will be solving panel supply and creating market demand which is why the Company is set to move back into the Australian market with a range of top end 4K UHD TV’s.
Foxconn is depending on subsidiaries Sharp and Innolux a Company that Foxconn part owns to meet the large LCD panel supply that will be needed to meet their ambitious targets.
Current market conditions are another core reason behind Sharp’s decision to focus on the TV market.
Previously, Sharp’s dwindling revenue led the company to license its TV brands to Slovakia TV manufacturer Universal Media Corporation (UMC), while it licensed its brand in North America to Chinese TV manufacturer Hisense. Hence, Sharp can only rely on the Asia-Pacific and Japanese market to support its TV revenues in the short term.
Hisense’s refusal to give up Sharp’s North America TV brand rights immediately, will affect whether the former Japanese consumer electronic company can reach Foxconn’s 20 million TV set revenue goal in 2017.
Observers claim that the challenging goal set by Sharp, to reach a TV shipment volume of 20 million sets by 2017 would be nearing the performance of the top three Chinese TV brands combined, in other words a global market share of 10%, said analysts.