“Apple display supplier Sharp Corporation recently reported its financial results for the fiscal year ending March 31,” Mark Hibben writes for Seeking Alpha. “The bleak financial picture at Sharp has caused a lot of speculation about possible blow back to Apple, including loss of Apple’s ‘investment’ in Sharp. But Apple has no direct investment in Sharp, and the only possible threat posed by Sharp’s situation would be the loss of a valued supplier.”
“Sharp’s financial results paint a bleak picture. For the year, revenue declined 4.8% to $23.3 billion, while it posted an operating loss of $402.9 million (at current exchange rates),” Hibben writes. “Last year, Sharp was doing much better, with an operating profit of $909.9 million.”
“Apple might take a stake in Sharp itself. Apple is highly motivated to put its overseas cash to good use, and securing a stable supply of a crucial component is a good way to do that,” Hibben writes. “This appears to be a golden opportunity for Apple to use its cash to good advantage as well as head off a possible incursion by rival Samsung, which might have the same thing in mind… How might the market react to such a development? Given that it’s Apple, I doubt the development will be viewed positively, and we’ll hear lots of wailing about the Sharp ‘boat anchor.’ This is just more noise for Apple investors to ignore. Apple must use its cash in order to become more vertically integrated. Opportunities to do so are relatively rare. I believe that Apple must take advantage of the opportunity presented by Sharp.”
Read more in the full article here.
MacDailyNews Take: Intriguing, but does Apple really want to take a stake of a perennially-struggling company like Sharp? What exactly does Sharp offer Apple that they can’t get at other suppliers who have figured out how to run sustainable businesses? Can Apple provide IP to Sharp that makes them viable or, at least, useful to Apple? Or, perhaps, due to their large volumes, would simply gaining the bulk of Apple’s display orders stop the bleeding at Sharp?
Apple display supplier Sharp warns on ability to stay afloat after $1.9 billion loss – May 14, 2015
Apple iPhone display supplier Sharp boosts operating profit – August 1, 2014
Sharp dedicates entire LCD plant to Apple – June 30, 2014
Hon Hai in no hurry to finalize Sharp deal – June 26, 2013
Sharp to replace chairman, president after losses – May 14, 2013