Over the years, Sharp has served as one of the key suppliers to Apple for several parts. Sharp’s president even said late last week that the company will begin shipping displays for the sixth-generation iPhone next month. The device is expected to be announced and to ship around the same time. You would think that Sharp would be well off with a contract from Apple, but that does not look to be the case. Sharp is in hot water, reported Bloomberg. Foxconn may be in-line to help the company survive, however, thus benefiting Apple.
You may remember when Foxconn announced that it bought a stake in Sharp in May. The company announced last week that it was seeking a lower price for the purchase, but it would continue to back the company. Bloomberg said that Foxconn wants to secure the stake in order to secure parts for its large client, Apple. Apple, of course, is one of the biggest parts buyers in the world, as it buys from Sharp, Foxconn, LG, Japan Display, and more.
Apple has a large bet on Sharp to ship its product worldwide. Without a key supplier like Sharp, Cupertino-based Apple could face huge delays when shipping a product by not keeping up with demand. Apple Chief Executive Officer Tim Cook has iterated the need to keep up with demand on the company’s quarterly earnings call time-and-time again. Furthermore, Sharp is said to be a key supplier for the rumored Apple television set that somewhat-famed, Apple-focused analyst Gene Munster said is coming sometime during 2013. Apple needs Sharp.
In related Sharp news, Reuters reported this morning that Sharp’s only option to survive might be to kill off its consumer division. Sharp is known worldwide for shipping televisions, but sales have not been great as of late. The company’s best bet would be to accept its fate as a component manufacturer. It has lost a large share of value this year, so it is kind of a RIM situation, as one might put it, where investors and customers are not impressed and losing interest.
We will continue to track Sharp’s fate, but I have a feeling the shipment of Apple’s iPhone will be the deciding factor (believe it or not). At any rate, I think the financially stable Foxconn will keep the company going for now to suffice Apple. [Bloomberg, Reuters]
Pictured above: Foxconn CEO Terry Gou