“Japanese display maker Sharp Corp , a supplier to Apple Inc, will aim to boost sales to the iPhone maker’s rival Samsung Electronics Co under a three-year rehabilitation roadmap after posting a worse-than-expected $5.4 billion net loss in the last financial year,” Reiji Murai and Tim Kelly report for Reuters.
“The business plan, released on Tuesday, will also lean on banks for another 150 billion yen ($1.5 billion ) in funds after they saved it last year from failure, with a 200 billion yen convertible bond falling due in September,” Murai and Kelly report. “‘For Sharp, the way forward is to forge various alliances to generate new oppportunites,’ said Kozo Takahashi, who was named president on Tuesday after his predecessor held the post for barely a year.”
Murai and Kelly report, “Takahashi said Sharp, which took big writeoffs last year after a focus on making screens for its own struggling TV business left it with excess capacity, will double to two-thirds the portion of panels produced for customers such as Samsung and Apple. He added that Sharp would look at expanding cooperation with Samsung in technology for small screens used in smartphones and other mobile devices.”
“A key challenge for Sharp’s recovery, however, is keeping its factories busy enough to earn profits that will satisfy its creditors despite slowing growth in its business making screens for Apple’s iPads and iPhones,” Murai and Kelly report. “Analysts project annual profit growth at Apple to average less than 5 percent over the next decade, compared with an average of 60 percent over the past five years.”
MacDailyNews Take: Which analysts; based on whose data; anticipating which products in the future? If “analysts’ projections” were right, Apple would be dead for a decade by now, instead of being the world’s most valuable company. Minor discrepancy. If only we had a penny for every incorrect analyst projection we’ve read over the years.
Murai and Kelly report, “In January, Sharp had to curtail production of 9.7-inch iPad screens, hurting output levels and threatening its recovery in profitability. The Japanese company is preparing to begin large-scale production next month of screens for Apple’s next iPhone model, sources familiar with the matter said.”
Read more in the full article here.
If Samsung is intent on killing Apple, all it has to do is refuse any more contracts for iPhone/iPad/iPod touch/iMac/MacBook Pro screens. That’ll be the end of Apple at a single stroke in one single day.
You sir clearly do not understand how contracts work. Apple has a contract with Samsung and all its suppliers. If either party defaults ie Apple doesn’t pay or Samsung doesn’t deliver there will literally be Hell to Pay.
Also if Samsung did NOT have a contract with Apple, which it reflects on its financial statements its stock would plummet.
samsung will need to have customers lined up for the spare capacity otherwise they are paying debt and lots of other expenses on production capacity they aren’t using.
this isn’t high school and competitors do business together all the time
Can someone give you a circumcision to go with your lobotomy?
Thanks SO much for your insightful contribution. Your thought is like a laser, cutting to the heart of the matter, illuminating the issues like a veritable ray of wisdom shining through crystal. I’m sure everyone has been inspired by your words and your amazing cleverness.
🙂
MDN’s take “If only we had a penny for every incorrect analyst projection we’ve read over the years.” raises an important question, are there actually that many pennies?
With Sharp being one of three display suppliers for iOS ( Japan Display & LG being the others ), I hope Samsung doesn’t get their clays in too deep.
Perhaps Apple can max out a few of Sharps plants for iPhone and iPad use.
“Analysts project annual profit growth at Apple to average less than 5 percent over the next decade, compared with an average of 60 percent over the past five years.”
That seems like a hit piece. An article looking into the health of Sharp silently slips in a pretty bleak outlook for Apple under the guise that this Apple’s profitability is somehow related to what they might or might not order from Sharp. Bogus.
This has the smell of another ginned up story planted by Samsung. Very unsubtle in the way it lays the failure of Sharp at the feet of Apple. Oh, poor Sharp; if only Apple wasn’t tanking their picture would be rosey.
All this say’s is Apple had better get into manufacturing screens, flash, CPU chips and any other mission critical parts, they have the money and no excuses.
… THAT! Apple has that pile of money, mostly ex-patriot, that is earning modest interest. It could be earning more if it were put to use building resources. But, would building resources for Apple products be profitable? Apple doesn’t pay top dollar for anything, they play it tight to the margin.
Think outside the box… I still think the best possible future for Apple is a fully automated robotic manufacturing/assembly plant. No politics, no bullshit media manipulation, no Samsung…
This is what I’m talking about.
Apple should help its suppliers like Sharp as to tries to get rid of Goosung not wasting 60 freakin billion on a useless buy back… Loan some of that cash over seas in good terms to companies like Sharp. Put the money to work. Stop but your own stock with shareholders money rewarding selling shareholders.