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Sharp Corporation (SHCAY) |
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WIKI ANALYSIS
Sharp is a Japanese multinational electronics manufacturer that dominates the Japanese market, with the largest market share by sales for both cell phones and LCD TV's.[1][2] Globally, Sharp is still a small player, with less than 10% of the LCD market[1] and about 1% of the cell phone market.[3] Unfortunately, the global economic downturn has hit Sharp worse than most American companies. Japan, where the company makes almost half of its sales,[4] has had a larger drop in spending than other markets.
Sharp is facing several challenges. The growing feasibility of manufacturing OLED TV's at low cost is challenging Sharp's piece of the TV market, as they are more efficient than LCD TV's. Sharp has seen a rapid decline in demand for its products due to the economic slowdown. Also, worsening trade conditions caused by the strength of the yen have further reduced demand for Sharp's products.
Company Overview
Business and Financial Metrics
Fiscal 2009 Results
Net sales for fiscal 2009 were 2,755.9 billion yen, down 3.2% compared to the previous year. In fiscal 2009, demand in the Japanese domestic market recovered thanks to government stimulus packages such as the Eco-Point System, a subsidy program to award "eco-points" for the purchase of environmentally-friendly consumer electronics. However, in general, the harsh business environment continued, with price declines resulting from severe price competition and the appreciation of the yen. Amid these circumstances, Sharp worked to increase sales of LED AQUOS, a high-image-quality, low-energy-consumption LCD TV, as well as health- and environment-related products, such as solar cells and home appliances equipped with Plasmacluster Ion technology. As a result, net sales continued to recover steadily from their low point in the fourth quarter of fiscal 2008 (January to March 2009).
Operating income was 51.9 billion yen, an improvement of 107.3 billion yen compared to the operating loss of 55.4 billion yen recorded in the previous year. This was due mainly to the cost reduction implemented as part of the recovery plan. Total costs for fiscal 2009 were reduced by 213.8 billion yen compared to the previous year, reaching our annual reduction target of 200.0 billion yen.
Net income was 4.3 billion yen, an improvement of 130.2 billion yen from the net loss of 125.8 billion yen recorded last year.
Business Segments
Consumer/Information Products (55.6% of 2009 sales)
Audio-Visual & Communication Equipment
Demand for Sharp's AQUOS brand has been high, especially for its large-screen, high-resolution LCD TV's, and high-definition video recorders. The company's high-end cell phones also sold well, as consumer preference for app loaded phones rose. To maintain its technological advantage, Sharp released LCD technology last year capable of tactile recognition.[5] This segment's products include:
- LCD color televisions
- Projectors and DVD recorders/players
- Blu-ray Disc recorders/players
- Mobile communications handsets and mobile phones
Health and Environmental Equipment
The segment's main offerings include the Plasmacluster Ion Technology, a filter that can be used with air conditioners, humidifiers, and washer-dryers, HEALSIO, a superheated steam oven, and refrigerators. Other offerings include:
- Superheated steam ovens
- Microwave ovens
- Air conditioners
- Washing machines
- Vacuum cleaners
- LED lights, solar-powered LED lights
Information Equipment
Sharp provides carriers WILLCOM Inc. and EMOBILE Ltd. in Japan, and T-Mobile in the USA with wireless PDA’s. Sharp purchases PDA's from original design manufacturer HTC, which are then rebranded and resold. The segment also produces high speed multifunctional digital printers, electronic dictionaries, calculators, facsimiles, telephones, POS systems, handy data terminals, electronic cash registers, LCD color monitors, information displays, digital MFPs (multi-function printers), options and consumables, software, FA equipment, ultrasonic cleaners.
Electronics Components (44.4% of 2009 sales)
Other Electronic Devices
CCD/CMOS imagers, LSIs for LCDs, microprocessors, flash memory, combination memory, analog ICs, components for satellite broadcasting, terrestrial digital tuners, RF modules, network components, laser diodes, LEDs, optical pickups, optical sensors, components for optical communications, regulators, switching power supplies
LCDs
Products include TFT LCD modules, Duty LCD modules, System LCD modules
Solar Cells
Sharp has been concurrently developing technology for two types of solar cell - for crystalline solar cells, and thin-film solar cells. Although Sharp is the worlds largest producer of solar cells, and demand for renewable energy has been rising, sales growth was stagnant for the three years until the run up in oil prices in 2008.
Breakdown By Geographic Region
- Japan: Sharp dominates its home country Japan. The company has the largest domestic share of the cell phone market, and is one of the largest players in the LCD and LSI markets.[2] Although sales rose 6.2% from 2007 to 2008, operating income fell 11.5% because of changes in Japanese corporate tax law.[4]
- The Americas: Driven by rising U.S. demand for LCD TVs, sales in the America's rose 8.3% from 2007 to 2008.[6] To satiate demand, Sharp opened up a new LCD TV production facility in Mexico,[7] causing operating income to fall 21.9%.[6]
- Europe: Regional sales in Europe rose 11.9%, and operating income climbed 38.8% in 2007. [6]
- China: Sharp's fastest growing geographic market, operating income increased 11.2% from 2007 to 2008, on sales growth of 22.4%.[6] Growth has been fueled by a growing population of Chinese capable and willing to buy high-end cell phones and TV with LCD technology. [4]
- Other: In Sharp's other markets, mostly in Asia, sales grew 12%, and operating income rose 74.1%.[6]
Anti-trust Suits Cost Sharp $123M & Its Reputation
In December of 2008, Sharp pleaded guilty to the U.S. government of three conspiracies to fix the prices of TFT-LCD panels sold to Dell, Apple Computer, and Motorola Inc.[8] Sharp's collaborators include LG, which was fined $400M, and Chunghwa, which was fined $65M.[8] In Japan, Sharp was fined $3M for fixing the price of LCD panels sold to Nintendo. In the U.S., Sharp was fined $120M, and has been forced to lower the prices of its LCD panels across the globe, cutting into the margins of its most profitable business.[9] Company executives have avoided the fines and prison sentences imposed on LC and Chunghwa executives in the U.S. so far, but as of January, the matter is not over.
This atricle keeps it real, no doubt.
Competition & Market Share
oled srneecs are oled srneecs are such a leap forward in performance; to the performance of CRT srneecs, which means unlimited contrast ratio and extremely low respond time .BUT the thing does not shoot lazers at a glass screen so its actually flatttttso its kinda the best of both worlds, lcd and crtwhat im looking forward to is how high the hz (FPS) of the screen can reach when combined with the respond time
Cell Phones
Sharp is a baby in the global cell phone industry, with just 1% market share in terms of sales in 2008.[3] The company has, until 2008, focused on the Japanese market, where it is the largest manufacturer of cell phones.[10]
Competitors with cell phone market share by sales for 2008 include:
- Nokia (38.6%) - Nokia has been hit the hardest by the slump in the cell phone industry, selling 53% fewer phones in Q4 2008 than in Q4 2007.[11] Nevertheless, the company still dominates the market, with more than double the market share of the second largest competitor in the field.
- Samsung (16.2%) - Samsung has tried to mitigate the decline of cell phone sales in developed markets by expanding its product offerings into 6 unique lines while reaching further into developing markets.[12]
- LG (8.3%) - Like Samsung, LG has begun development of a low-tier platform in order to better compete in developing countries, where cell phone sales are still growing.[13]
- Motorola (8.3%) - Motorola's top product is the RAZR, which was made with fashion in mind. Like with Sharp, the introduction of smart phones has caught the company off-guard.[14]
- Sony-Ericsson (8%) - This partnership between Sony (SNE) and Ericsson B (ERIC'B-SK) has focused on improving the music storage and playback capabilities of traditional cell phones, culminating with the development of the Walkman phone.
Other competitors include: Research in Motion (RIMM), Kyocera (KYO), Apple (AAPL), and Hungarian Telephone & Cable (HTC).
Solar Energy
The most effective way to distinguish solar cells is by their conversion efficiency, though these distinctions are small, leading to the increased commoditization of the industry. This is a measure of the electrical energy generated from the solar cell against the light energy input (a combination of light intensity and the area of the solar panel).
Sharp is the largest photovoltaic cell manufacturer in the world, with a market share of 24%.
- SunPower (SPWR) - One of the fastest growing solar companies, with one of the most efficient cells around.
- Suntech (4%) - A Chinese photovoltaic cell company that is muscling its way into world solar markets.
- JA Solar Holdings,- A Chinese PV company that only sells monocrystalline solar cells; it lets its customers take care of building the modules and systems.
- Solarfun Power Holdings - Another Chinese PV company that operates 90% in Europe and makes most of its money by selling modules, rather than individual cells.
- Evergreen Solar - A solar company that produces string ribbon PV cells and operates at all production levels from silicon wafer to power system.
- Kyocera (8%) - A Japanese electronics company that is also a large manufacturer of solar cells.
- Q-Cells (9%) - A privately owned, German solar manufacturer.
- First Solar - A thin cell solar panel manufacturer that uses cadmium telluride instead of silicon for its cells.
- BP (5%), Mitsubishi (6%), and Sanyo (7%) - Not primarily photovoltaic cell manufacturers, but heavy market competitors nonetheless.
- EMCORE - A Concentrated Photovoltaic System manufacturer that uses Gallium arsenide PV cells and got its start in the solar business making power cells for satellites.
- Energy Conversion Devices - This company uses amorphous thin-film silicon in its ultra-thin, albeit low-efficiency solar cells.
| Manufacturer | Conversion Efficiency |
|---|---|
| SunPower(Polysilicon) | 23.4%[15] |
| Suntech Power Holdings(Polysilicon) | 18%[16] |
| Sharp (Polysilicon) | 13%[17] |
| Kyocera (Polysilicon) | 18.5%[18] |
| Solarfun (Polysilicon) | 17.2%[19] |
| JA Solar Holdings (Monosilicon) | 17.7%[20] |
| Trina Solar(Mono & Polysilicon) | 16.6%[21] |
| Evergreen Solar (String Ribbon) | 15%[22] |
| EMCORE (GaAs Concentrated Solar System) | 37%[23] |
| Energy Conversion Devices (Amorphous Silicon Thin Film) | 8.5%[24] |
| First Solar (CdTe Thin Film) | 10.5%[25] |
| DayStar Technologies(CIGS Thin Film) | 14% [26] |
| Ascent Solar (CIGS Flexible Thin Film) | 9.5% [27] |
References
- ↑ 1.0 1.1
- ↑ 2.0 2.1 Annual Report, 2008, Firscal 2007 Review By Product Group, Page 23
- ↑ 3.0 3.1 ars technica - iPhone passes 1 percent goal for 2008, looking good for 2009
- ↑ 4.0 4.1 4.2 Annual Report, 2008, Financial Review, Page 39
- ↑ JCNetwork - Sharp Announces New System LCD with Embedded Optical Sensors; Provides Input Capabilities Including Touch Screen and Scanner Functions
- ↑ 6.0 6.1 6.2 6.3 6.4 Annual Report, 2008, Financial Review, Page 40
- ↑ Forbes - Sharp to construct LCD TV production base in Mexico - report
- ↑ 8.0 8.1 INetwork World - Asian executives face jail in U.S. for fixing LCD prices
- ↑ Alley Insider - US Government Busts LCD Cartel: LG, Sharp, And Chunghwa To Pay $585 Million Fine
- ↑ HighBeam Research - Sharp eyes China's cell phone market
- ↑ The Tampa Tribune - Signaling A Change In The Cell Industry
- ↑ Samsung mobile - SAMSUNG UNVEILS NEW CONSUMER SEGMENTATION MODEL TO SPUR GROWTH
- ↑ Silicon Republic - Mobile phone market begins major freefall
- ↑ LA Times - Razr loses sales edge to iPhone in shift to functional fashion
- ↑ Renewable Energy Access
- ↑ Forbes - Sun King; SunPower's New Solar Panel Is 22% Efficient
- ↑ SharpUSA Product Brochure
- ↑ Kyocera - Solar Timeline
- ↑ Solarfun Website
- ↑ http://jasolar.com/Web/products-en.asp
- ↑ TSL 20-F 2007 Pg. 7
- ↑ ESLR 2007 Earnings Call Transcript, Page 1
- ↑ EMCORE.com: Terrestrial Solar Cells and Receivers"
- ↑ ENER F1Q08 Earnings Call Transcript, Page 5
- ↑ First Solar 2007 Q3 Conference Call
- ↑ DSTI 10-k 2007 Pg 1
- ↑ Ascent First Quarter 2008 10-Q Pg 23
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