1. Akshay Masand's Avatar

    Sharp is a key supplier of components that go into iPads and iPhones that ended up losing $5.4 billion last year. This loss prompted the Japanese display maker to increase its reliance on Apple’s rival, Samsung, in order to survive. The company appears to be entering a three-year rehabilitation program, hoping to reverse its fortunes. As a part of that plan the company will cooperate more closely with Samsung on the technologies used in the displays for mobile devices. According to Sharp president, Kozo Takahashi:

    For Sharp, the way forward is to forge various alliances to generate new opportunities.
    Last year, Sharp took big write-offs due to excess display capacity after a failed attempt to boost its own TV business. In light of that, the company will be focusing more heavily on display panels produced for companies like Apple and Samsung. The news of having even closer ties to Samsung comes just two months after the South Korean manufacturer took a $112 million share in Sharp, despite the company’s continuing struggles. The deal will provide Samsung with “a long-term, stable and timely supply of LCD panels for large-size TVs and small- and medium-size LCD panels for mobile devices,” according to a press release at the time.

    The development also further complicates things between Apple and Sharp. Eager to distance itself from Samsung, Apple has been shifting its supply sourcing to Samsung’s competitors, including Sharp and LG. In order to shore up Samsung’s supply chain competitor, Apple may have gone so far as to invest $2 billion in Sharp last year according to one analysis.

    The closer alignment with Samsung is driven in part by an apparent slowdown in demand for the displays Sharp makes for Apple’s iPads and iPhones. Sharp previously cut back production of 9.7-inch iPad screens in January, though it is reportedly close to beginning production of displays for the next generation iPhone. The softening demand for Apple’s devices seems to be a common theme lately though. Over the past few months, multiple suppliers have announced declining revenue, citing demand for Apple products as a reason.

    Source: Reuters via AppleInsider

    Twitter: @AkshayMasand
    2013-05-14 11:00 PM