OFweek smart home network news from loss to profit, joint Google, plant investment, the third return to the Chinese market, this series of news seems to make the sale of Foxconn's Sharp faintly has some Jedi rebirth.

At this time last year, Gou's move to acquire Sharp also took a stubborn decision. Although the appearance of today cannot be said to have been accomplished, the smooth operation of the business after reorganization can at least explain Foxconn's weight to Sharp. The market has created a good start. Of course, the rebirth mentioned here refers not only to the level of manufacturing, but also to the process of covering brands from new to new life. The latter is one of the important goals pursued by Foxconn.

However, Sharp, who has been absent for many years and has undergone a drastic change in the situation, is still surviving with technology. Can Sharp, under the help of Foxconn, revive Nirvana and Jedi to fight back? I'm afraid that behind this is not only like a tiger like a tiger's rival, more is the consumer market to a decline of the Japanese household electrical appliance brands questioned.

Sharp may turn profitable but it is not clear

The general reversal of Sharp's performance is an unquestionable fact. According to relevant reports, in the last financial year that ended on March 31, Sharp's loss amounted to approximately 25 billion yen, which was lower than Foxconn's previously expected loss of 27.1 billion yen. Moreover, compared with the huge loss of 255.9 billion yen in 2015, the number of losses has been reduced to one-tenth within one year, which is enough to show that Sharp's current performance has greatly improved.

In addition, the single-quarter earnings from October to December of last year provided Sharp with sufficient opportunities to shake off its annual losses. It is also based on the premise of business improvement that Sharp expects operating profit for fiscal year 2017 to increase to 90 billion yen. , an increase of 44% year-on-year, which may result in a net profit turnaround and a profit of 59 billion yen. From the above data projections, it can be seen that Sharp's plans for the next few years are quite confident, and she also indicates her ambition to return to the market.

But this is after all based on subjective delusions. In fact, the market has always been skeptical about Sharp's revenue capacity. On the one hand, this old giant company's losses have caused Foxconn to lose its position year after year. This incident has shown that Sharp has accumulated hardships. Profitability is open to question. The other reason why Sharp is able to reduce huge losses or even close to profits in such a short period of time is mainly due to a series of rectifications after Hon Hai’s entry into the government. Like a key factor, this has caused the market to remain skeptical about its future revenue capacity.

Sharp’s stock price reached a record high since the acquisition last year when it expects to achieve its first profit of 40 billion yen in three years. However, this situation is not favored by the European and American media. Credit Suisse's previous projections show that Sharp's stock price is reasonably positioned at 120 yen, which implies that there was a 30% virtual component at that time. The reason behind this view is that they think that Sharp's profit comes from the compression of operating costs, rather than the driving of revenue.

On this issue, we can talk about open source and throttling. After Hon Hai's acquisition of Sharp, stop-loss became a top priority, and the method of controlling the cost of implanting the Hon Hai-style was obviously the quickest way. Therefore, Hon Hai conducted a reduction in personnel reduction, scale procurement, and strict control of costs. Series structural reforms.

For example, on the personnel side, large-scale layoffs resulted in the total number of employees being reduced by more than 20% from the peak, which greatly reduced the fixed costs. In operation, unnecessary and no hassle were cut as much as possible, and the direct decision to withdraw from the sluggish North American TV business was effective. Reduce investment in overseas markets.

The key is that in the aspect of overall production cost and production efficiency, the entire process of the company's genes throughout Sharp's manufacturing, such as silicon materials for photovoltaic panels, has changed the long-term contracts previously purchased at higher than market prices. Bring about 10 billion yen in revenue improvement effect for Sharp. In addition, Japanese companies have always been known for their rigorous prudence in the control of the production process of electronic products. This has also led to long-term difficulties in improving the status of inefficiencies. It is precisely because of Foxconn's management model and working methods that this can be compensated.

Compared with the cost control effect, Sharp is basically at the initial stage of restarting in terms of open source. As soon as the mobile phone business and television business have just returned to the Chinese market, the status quo of the external environment and industry competition contains unlimited risks, and brand remodeling will face too many obstacles. At the same time, the most important layout of the panel line, the newly invested factory is still under construction, OLED panel is only made some progress, Samsung this mountain will continue to stand in the way of market development.

All in all, Sharp has not yet demonstrated extremely strong revenue capacity. From losses to earnings, it is more dependent on controlling costs. Market doubts are inevitable. However, this is the inevitable result of the starting point period. The return of business in the next few years is the moment when it is on the right track.

Opportunity, China will be Sharp's new birthplace?

China is now a top priority for any company. Sharp's representative of the Japanese electronics giant is particularly so, and this level of urgency has risen to the point where it is essential to survive, which is from its near future to the market. The re-layout can be seen.

On the one hand, Sharp once stated that he will completely withdraw from the domestic LCD TV production business in 2018 and concentrate on development, trial production and after-sales service. It can be said that he directly declared “death” in the domestic market, which of course also means overseas markets. This will be Sharp's only life-saving straw business; on the other hand, Sharp decided at the end of last year to spend RMB 10.4 billion to collect a 56.7% stake in SUMC because SUMC holds Sharp's old Polish factory, so the move to acquire European TV brands is undoubtedly a move. Return to the European TV market.

Compared with the former two, Sharp's move to return to the Chinese market is more high-profile, whether it is on the mobile phone business or LCD TVs. Foxconn began revitalizing the TV business shortly after its acquisition of Sharp. With its manufacturing and channel advantages, Foxconn achieved higher-than-expected performance in the sales season last year. Even among the general decline in the TV industry, it achieved the only adverse effect. Potential growth.

At the same time, Sharp warmly announced the good news from the loss to profit, and announced the plan for the third time the mobile phone to return to the Chinese market, and disclosed the strategic cooperation with Jingdong, China Mobile and Dixon. Whether or not these moves to return to the market can be successful in the end, from the perspective of layout alone, it has been shown that the Chinese market is the key to Sharp's ability to be truly reborn.

And have to admit that the timing and strategic choice of Sharp's business return is particularly appropriate, which is one of the factors that can foresee profitability in such a short time. Taking LCD TVs as an example, the panel market was in short supply in the second half of last year, which was a big opportunity for Sharp to return to China’s TV industry. Therefore, Sharp even changed its previous high-end positioning in the face of rising domestic brands. Captured a large number of consumers with price advantage.

If the rising cost of the panel brings with it a bit of luck, the current changes in the domestic television industry are more like the timing for Sharp to wait a long time. The reason is that the Internet TV brands whose appearances have been made have shown a slight decline in the context of rising costs and the company's own plight. For example, LeTV, as the pioneer of using Internet content services to open up the Internet, is now trapped in corporate crisis, and Xiaomi's impact on the decline of smart phone business has also damaged the brand image. Although more of them are subject to indirect factors, the Internet TV brand situation is not optimistic, after all, is an objective fact, which also makes technology companies once again demonstrate competitive advantages, and Sharp has also maintained the "father of LCD" in the name.

All in all, the focus of competition in the TV industry may be returning to product quality, which is undoubtedly a favorable situation for Sharp. Of course, the coexistence of danger and opportunity is a distinctive feature of China's market. Excluding the macro market environment, massive and powerful competitors are definitely the biggest obstacle to Sharp. The most important thing is that these brands are rooted in the local market and have formed a certain degree of loyalty in the minds of consumers. This is far from a Japanese company that has withdrawn several times and lost its brand. Therefore, even if it is behind Foxconn, reshaping Sharp's brand is by no means essential. Easy to do.

Can technology reshape Sharp's brand?

The decline of the brand and the persistence of core technologies is a true portrayal of Japanese electronics giants. Sharp is particularly fortunate to have taken the Foxconn ship before its brand has been completely destroyed, but this still fails to address such companies. The key issue is: After a hundred years of lagging behind, companies are lagging behind the trend of the industry and the market is losing. Under such circumstances, we can rely on the only technological advantage to reshape the brand and return to the mainstream. This is also the key to Sharp’s foothold in the environment surrounded by strong domestic rivals.

The situation is certainly not optimistic. After all, reviewing overseas companies going to and from the Chinese market can find that from the exit to the return, the midway market changes too quickly. In particular, the speed of the rise of Chinese enterprises has made many foreign companies breathtaking, so that they can successfully return to China. There are few mainstream markets.

Moreover, for Sharp, Foxconn itself has already included Sharp into the target system from the manufacturer to the brand. This brings not only the overlap of the two parties' development direction, but also the pressure from Foxconn. In short, Sharp's only ability to rely on is its technological advantage accumulated over the years, but whether it can be changed back to the brand is also influenced by many factors.

Sharp's advanced technology is concentrated in panel manufacturing, and panel manufacturing involves three aspects of its mobile phone, television and panel supply business. All three are important components of Foxconn's restart of the Sharp brand.

First of all, for Sharp mobile phones that have only recently announced their return to China, it is obvious that the characteristics of a full screen alone should make it difficult to shake the domestic market. On the one hand, it is because Xiaomi’s attempt to fully screen mobile phones last year was used as a reference. In fact, it does not have strong persuasion. Force, after all, a full-screen mobile phone did not save Xiaomi who was caught in the ice. On the other hand, the saturation of the domestic mobile phone market and the stagnation of major brands have been maintained for many years. Basically, it is difficult to have a foothold in Japanese brands. Even if one step back, the full screen may become a momentary trend. Sharp can only become a niche brand. This is mainly because Sharp's mobile phone brand does not have much recognition in the domestic market.

Compared with mobile phones, Foxconn's focus on supporting TV services and panel supply has more development prospects and values. Especially after joining Foxconn's cost control system and channel advantages, Sharp's technical capabilities are based on these defects. Barriers may be formed to reshape the brand. And the emphasis is on Sharp's technology, which was previously considered to be ahead of the curve. With the promotion of certain current trends in the LCD TV market, it may be able to adapt to the maximum efficiency.

According to data from Quzhi Consulting, shipments of large-size panels such as the 49-inch, 55-inch, and 65-inch models have grown significantly, with the 55-inch portion increasing to 12.4% and the 65-inch portion increasing to 3%. And the average size of the global LCD TV panel in 2016 has reached 42.7 inches, an increase of 2.1 inches from last year. This shows that in the next few years, the end consumer market will lead the TV market to continue to increase in size. Another market research agency HIS Markit has said that 8K TV LCD screens will be put into production this year and is expected to increase to 2.62 million by 2020.

The 8K image and large-size trend are no different from the core technology of Neusoft Sharp. In particular, this advantage is also reflected in the time to grab the initiative. It is reported that the only line of mass-produced liquid crystal panels in the world at the time of the 10th generation is Hon Hai's and Sharp's plutonium factory. According to the most efficient production efficiency, the plant can supply 7 million 57-inch LCD panels or 5 million annually. 65-inch LCD panel. In other words, only the Hon Hai Sharpe plant family can achieve stable supply until 2018.

Furthermore, it cannot be overlooked that Sharp's 10th-generation line has created a miracle in the history of LCD panel manufacturing in terms of equipment size, specifications, and finished product technology. It was only because technology was ahead of the mainstream market that caused this advantage to be delayed. Can not be effective, but now all kinds of trends may indicate that Sharp has waited for the time has come. It can thus be seen that if the large-screen TV will become the next consumer demand, Sharp's starting point should be higher than other domestic brands or manufacturers, which means that Sharp may reshape its brand in the ultra-large screen market.

Of course, Sharp will also face the suppression of China's panel makers. After all, the 10th-generation line battlefield has been undercurrent, and domestic manufacturers are clearly more aware of the local market, not to mention the leading Korean brands on the market. In addition, Sharp is now expanding its market in China, taking a different low-cost route from the original, this will give the future attack on the high-end positioning of the major screen negative impact? After all, brand remodeling should prevent consumer preconceptions.

A company or brand never falls back to rebirth, and it is difficult to recover from the pains and weaknesses. Sharp is also the case. Now we can only look at its remaining technical strength and Foxconn's external help, can it create new ones for it? The foundation for survival is, in short, obstructive and long.

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