Beijing on January 5th news, according to "the Wall Street Journal online edition reported that in the last year when Foxconn acquisition of SHARP, the iPhone business one of the objectives is to use SHARP to build their own global brand awareness of the consumer electronics business.
SHARP Aquos LCD TV
But now, Foxconn is facing a major obstacle: in the United States, the right to sell SHARP brand TV belongs to Hisense, which has said it did not intend to accept SHARP's request to return the right to use the brand.
Foxconn is one of the world's largest producers and manufacturers of other companies. Foxconn's customers include apple, SONY, Nintendo, but the foundry business profit margins are low, and the growth potential is limited.
This is why Foxconn chairman Terry Gou last year spent 388 billion 800 million yen (about $3 billion 300 million) acquisition of SHARP, which is a 104 year history of consumer electronics manufacturers. Terry Gou said he would like to use SHARP, a well-known brand to allow Foxconn to become a respected high-tech consumer electronics innovator.
Foxconn chairman Terry Gou
In order to achieve the revival of the brand SHARP, Terry Gou need to get back SHARP in the past few years in order to raise cash and the right to sell. Terry Gou chose to let his right-hand man Dai Zhengwu responsible for the operation of SHARP. In December last year, Dai Zhengwu took back the right to use SHARP's brand in Europe, the method is a direct acquisition of the company previously authorized.
In a news conference last November, Mr. Dai Zhengwu said he plans to scrap a deal with Hisense, a Chinese electronics maker. Last year, Hisense acquired the right to sell SHARP branded TV in the United States, until the end of 2020.
Hisense rejected SHARP's offer to buy back
SHARP, Foxconn declined to comment.
Television is no longer a lucrative product for consumer electronics companies, as China's low-cost TV makers are struggling. But Atsushi, a professor at Waseda University's Osanai School of business, says television is still an important marketing tool, and companies like to see their brand names in the middle of the living room. Long thick worked in the SONY TV sector.
Hisense hopes to enhance SHARP's share of U.S.
That's why SONY and Panasonic, the two Japanese companies, are still selling televisions in the United States after cutting back on many consumer electronics businesses. Hisense hopes to expand its influence in the U.S. TV market, plans to launch this week at the International Consumer Electronics Show (CES) on the launch of the new SHARP brand tv.
Lin Lan said that SHARP benefited from the license agreement, because Hisense will pay a certain fee for each SHARP brand TV sales to SHARP.
But Dai Zhengwu said in November last year, he hopes to get full control of the SHARP brand, buy back the right to use it is the first step in the introduction of long-term strategy SHARP branded products. He said that SHARP's products are mainly sold in Japan, including air purifiers, cooking pots, etc..
Refusal to buy back is a negotiation strategy?
Although Hisense refused to renegotiate the position may be a strategy to obtain a higher offer from cash to the hands of Foxconn, but if Hisense insisted on doing so, it is also a challenge for Foxconn.
Foxconn plans to invest $8 billion 800 million to build a LCD panel factory in Guangzhou, using SHARP's technology. Informed sources said that Foxconn has said it will stop the supply of Samsung Electronics, Hisense LCD TV panel. This means that Foxconn needs another big customer, the customer may be a subsidiary of SHARP.
In addition to China, the United States is also a major consumer market for the production of large-size LCD panels for Foxconn's new Guangzhou plant. Over the past few years, Foxconn has tried several times to promote the product directly in the market. But analysts believe that Foxconn SHARP to re create a global brand challenges.
SHARP is a well-known brand in Asia, but its popularity in Europe and the United States is relatively low. This means that, at least in the next 5 years, Foxconn needs a large marketing budget, which highlights the need to take back the right to use SHARP TV brand in the United states.
Hisense says SHARP brand helps companies build marketing know-how and build relationships with major U.S. retailers. Analysts said that Hisense may eventually use these resources to promote their own brand TV, which is a challenge for Foxconn.
Hisense declined to comment on its business plan.