Sharp holds Key to Foxconn's Restructuring

Look at that cute little guy.

Something interesting will come of this relationship.


Asia Nikkei

At a press conference in Taipei on Sunday, Foxconn Chairman Terry Gou boasted about Sharp's improved financial results and reiterated that the purpose of the takeover is vertical integration.

Gou has asked Sharp to increase the number of new products and strengthen its brand. He hopes that accomplishing these goals, coupled with Foxconn's cost competitiveness and finances, will lead to something like South Korea's Samsung Electronics.

That is what he means by vertical integration.

With Foxconn's growth as a contract electronics assembler now reaching its limit, the key to a structural overhaul is Sharp.

One of the earliest fruits of the integration could become visible in Shenzhen. On Jan. 19, Sharp opened a research and development center for home appliances in the southern Chinese city.

Shenzhen is Foxconn's main production base, and the company plans to further strengthen functions there to help develop products for its major clients, including Apple. The new Sharp center will be an addition to Foxconn's already sprawling Shenzhen ecosystem.

Apple Switching to Jabil?

The landscape is changing in smartphone land. It could be that Foxconn just leaked too much or something else entirely.

LoadtheGame

DigiTimes has information from Taiwanese sources in Apple’s supply line that the company will be cutting ties with Foxconn for manufacturing of the iPhone 8, and instead turning to competitor Jabil. Jabil will offer a “forged stainless steel chassis” that holds together the front and back “glass panels” that make up the new smartphone.

Digitimes

The direction of Sharp

So, new management shows up at Sharp. 

The new guy will look at all the assets of the company and how to leverage them.

This company has access to Microvision's technology -- and a collection of large and powerful customers.


Taiwan's Sharp Savior

Tai Jeng-wu, 65, took over as president of Sharp Corp. in August after Foxconn Technology Group, and its founder Terry Gou, won a four-year battle for control of the struggling electronics maker. One of Gou's long-time lieutenants, Tai (pronounced Dai) is tasked with delivering on promises to turn the company around after five annual losses in six years.

****

Fluent in Japanese and an operations specialist, Tai's 30-year career at Foxconn means he's been alongside Gou as the company transitioned from plastics molding and low-end components maker to become the world's biggest manufacturer of electronics including the iconic iPhone, which put the Taiwanese company on the map. He led the protracted battle with creditors and shareholders to get control of Sharp, and was instrumental in turning around Sakai Display Products Corp. which Gou owns personally along with Sharp.

To keep the turnaround on track Tai will be trying to leverage Foxconn's close relationships with major clients, including Apple Inc., to keep its finger on the pulse of technology developments and win more orders. For sure, Foxconn and its biggest client are keen to sideline their mutual rival Samsung Electronics Co. which is both a supplier to and competitor of Apple, but that can only happen if Sharp is able to offer the right products.

Weird things that affect the industry....

There is a basic theme of Microvision, its abilities and ultimate value: People want bigger screens on their mobile devices & Microvision's scanning technology will play a critical role in upcoming technologies that are widely anticipated: Gesture control, Augmented Reality, screenless displays and robotics including self-driving cars.

For me, that's an investing theme that is worth sticking with.

That said, this is an example of something completely unrelated making the market difficult. Problems can pop up anywhere. Opportunities can pop up anywhere too. I think we're much more likely to start finding pop-up opportunities.

Everything is connected, and unintended consequences are... unintended.


HindustanTimes -- more at the source


Mobile manufacturing falls 40% as note ban spells wrong number for industry

At a time when the government is looking to push digital payments, the production of mobile phones in India is down by at least 40%.

The ban on circulation of banknotes of Rs 500 and Rs 1,000 has hit the industry hard, with handset manufacturers, including Foxconn, Flextronics and GDN-Wistron, may have been looking to cut jobs or sending employees on leave.

“Contract manufacturers are seeing a 40% slump in production, with consumers putting off purchases, which is killing demand,” an industry executive told HT on the condition of anonymity. “The situation is so bad that they might have to take tougher decisions regarding employees,” he added.

iPhone to be made in the USA?

Have stayed clear of politics here, but this is the kind of thing that can result. There may be some shifting of manufacturing, and how money is allowed to move around the world. So far, I find that that political change will likely have a positive effect on Microvision's Investors. (I admit that I could be wrong about that) Not sure what the effect will be on Apple, but a decision to move manufacturing back across an ocean doesn't happen without a reason.

Nikkei Asian Review -- More at the source

Key Apple assembler Hon Hai Precision Industry, also known as Foxconn Technology Group, has been studying the possibility of moving iPhone production to the U.S., sources told the Nikkei Asian Review.

"Apple asked both Foxconn and Pegatron, the two iPhone assemblers, in June to look into making iPhones in the U.S.," a source said. "Foxconn complied, while Pegatron declined to formulate such a plan due to cost concerns."


Foxconn, based in the gritty, industrial Tucheng district in suburban Taipei, and its smaller Taiwanese rival churn out more than 200 million iPhones annually from their massive Chinese campuses.
Another source said that while Foxconn had been working on the request from Apple Inc., its biggest customer that accounts for more than 50% of its sales, Chairman Terry Gou had been less enthusiastic due to an inevitable rise in production costs.

Desperate for Innovation & Profit: iPhone Crisis

No doubts about the importance of what PicoP can be.

Better than DLP -- especially when going for smaller and brighter.

Smartphone companies are desperate for innovation -- Apple and all of the other phone companies. (Apple recently made ALL of the profits in smart phones, and enough companies lost money making them that Apple made 105% of the industry's profits.) 

A company that can out-innovate Apple stands to gain hugely, and if Apple is the big innovator, they can continue to enjoy the position they've had in the market.

...the next fantastic new feature.



Forbes

iPhone bullish: “Apple has recorded an insane mobile phone profit share in the third quarter,” said 9to5Mac, echoing a crush of similar reports that cited a research note from BMO Capital Markets, which estimated that Apple captured 103.6% of total smartphone industry profits, with Samsung a distant second.

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iPhone bearish: Then we have recent Apple “innovation crisis” comments from Sharp President Tai Jeng-wu, who is also an executive at Sharp’s parent company Foxconn Technology Group. “We don’t know whether Apple’s OLED iPhones will be a hit, but if Apple doesn’t walk down this path and transform itself, there will be no innovation. It is a crisis but it is also an opportunity,” Tai said to the Japan business daily Nikkei a week ago. Foxconn is a contract manufacturer of Apple’s phones and Sharp has been supplier of displays to Apple.

Foxconn & Arm Holdings to cooperate

I clipped a lot of this, because they restrict access. 

This is the kind of relationship building that deserves watching.
AsiaNikkei  -- More at the source.

TAIPEI -- Key iPhone assembler Hon Hai Precision Industry, also known as Foxconn Technology Group, is trying to expand its foothold in the semiconductor industry by partnering with SoftBank Group-owned ARM to create a chip design center in the southern Chinese city of Shenzhen, people familiar with the matter told the Nikkei Asian Review.

The move highlights the ongoing efforts by the world's largest contract electronics maker to build more key components and tap into new technologies for future growth faced with weakening global demand for smartphones. While Foxconn Chairman Terry Gou has set an annual sales growth target for his manufacturing empire of 10%, Hon Hai's revenue for the first nine months of 2016 dropped more than 3% year-over-year.

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Other than Apple, Foxconn also assembles handsets for major Chinese brands including Oppo, Huawei and Xiaomi, with Japan's Sharp also planning to increase its smartphone offerings.

An industry executive said that Foxconn has been trying to develop an application-specific integrated circuit (ASIC), a customized chip, even though the company's presence in the semiconductor field has been very limited so far.

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The person further said that Foxconn has recently made a strong investment commitment to the Shenzhen authorities with the signing of the memorandum of understanding.

Shenzhen is already home to Foxconn's China headquarters and now it seems that the coastal city may play an even more vital role in the Taiwanese manufacturing titan's future, with Apple also expanding operations in the area.

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Earlier this month when Chief Executive Tim Cook visited Shenzhen, Apple, which accounts for more than 50% of Foxconn's annual revenue, announced that it will set up a research and development center in the coastal city, coinciding with Foxconn's move to deepen ties with local authorities.

During Cook's trip, Gou accompanied him to meet Chairman Xu Shaoshi of China's National Development and Reform Commission and other senior Shenzhen officials.

Meanwhile, the new Foxconn-ARM chip design center is being created following close collaboration between Gou and SoftBank Chairman and Chief Executive Masayoshi Son.

Both share the belief that the IoT will be a major growth driver in the future and it should become a core business of their respective companies. This conviction led Son to acquire ARM for 23 billion pounds ($31 billion) earlier this year.

Sharp's after Foxconn acquisition -- smartphones

The news here is in the headline. 

WHY would Foxconn take what is now an ailing division of their company (Sharp) and focus it on something that has been declining in their market place and been a relatively dog-eat-dog market, where profit margins continue to become thinner? This doesn't seem like a smart move. They didn't acquire this company to lose money on it --- maybe Sharp has some kind of something new they can incorporate in their smart phones...

Sharp's Post-Foxconn Acquisition Plan Is To Dive Into Smartphones

ChinaTechNews

Even though rivals Coolpad and Xiaomi are showing declining smartphone numbers, Sharp has deviced to jump into the mobile phone market.

A few months after being acquired by Taiwan-based Foxconn, Japan's Sharp has launched two new phone products Sharp C1 and Sharp A1 in Beijing.

Now that it's in the Foxconn and Hon Hai family, Sharp is targeting young consumers born after 1990 and both of the two smartphones will be sold at CNY1,499.

Sharp C1 features a 13-million-pixel camera and rear camera with autofocus function. It has 64GB storage, 3D curved glass back shell, and 5.5-inch screen. Meanwhile, Sharp C1 has ideep cooperation with Chinese online video website Iqiyi and Sharp users can gain a six-month Iqiyi VIP membership.

Sharp A1 features Helio X20 flagship 10-core processor with strong performance and high speed. This product has a curved metal design, 16-million-pixel rear camera and eight-million-pixel front camera. It also carries LeEco's EUI system and supports all mobile networks. In addition, users will gain a six-month LeEco membership.

Both Sharp C1 and A1 will be sold at CNY1,499. E-commerce website JD.com already opened a booking channel for the two products, which will officially open for sale on September 7, 2016.

As Sharp wades in the swamp of smartphone businesses in China, others are not faring so well. Chinese smartphone maker Coolpad recently published its semi-annual performance for the first half of 2016, stating that the company's operating revenue was HKD5.277 billion, a year-on-year decrease of 39.9% from HKD8.783 billion, and it reported net losses of HKD2.053 billion, a year-on-year decrease of 173%.

During the first quarter of 2016, China's smartphone shipment reached about 104.9 million units, representing a decrease of 5% compared with the 109.8 million units in the same period of last year. During the first quarter of 2016, OPPO exceeded Xiaomi to become the second largest smartphone maker in China, behind Huawei.