Sharp Targets 'Smart' Home Appliances -- WSJ

By Takashi Mochizuki Features Dow Jones Newswires

SAKAI, Japan -- Sharp Corp.'s recovery plan: Become a major home-appliance maker under the wing of its Taiwanese parent, Foxconn Technology Group.

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The Japanese company, which supplies Apple Inc. with iPhone display panels, said its "smart home" business unit, whose products include high-end Internet-linked appliances, would be a major driver of growth. It forecast sales for the division of more than Yen1 trillion ($9 billion) in the fiscal year ending in March 2020, up from Yen551 billion in the just-ended year.

"We are definitely going to achieve a V-shaped recovery," Sharp Chief Executive Tai Jeng-wu told reporters at the company's headquarters on Friday. Sharp expects its first net profit in four years this fiscal year, forecasting it at Yen59 billion ($530 million).

Mr. Tai is the No. 2 official at Foxconn, which is formally known as Hon Hai Precision Industry Co.

Sharp, which was bought by Foxconn last year after falling into financial crisis, is known in Japan as a maker of quirky electronic products such as smartphone-hybrid humanoid robots. Its growth, however, has been largely driven by liquid-crystal displays it provides for TVs and smartphones. That market has always been volatile, and Sharp last year teetered close to bankruptcy, weighed down by heavy factory investments of the past.

While the display business will remain an important source of revenue, Mr. Tai said company will step up efforts to provide "smart office" products to enterprise clients and invest in developing sensors for next-generation automobiles.

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Foxconn's profile as the world's largest contract electronics manufacturer will help Sharp spread its appliance innovations, said Atsushi Osanai, a professor at Waseda Business School in Tokyo. "Sharp can become Apple of the home-appliance industry if it works well with Foxconn," he said. "It's not totally unrealistic that Sharp becomes a realistic competitor to Samsung in the global appliance market."

Sharp and other Japanese electronics makers made their name globally with TVs and other consumer electronics. However, they have rarely been major global suppliers of appliances. Analysts say they failed to develop products based on local requirements and withdrew prematurely from unprofitable markets.

Mr. Osanai said Sharp's ambitions won't be achieved in just a few years.

"It requires a heavy commitment to stay in the global market regardless of what happens, or how unprofitable the business is, to gain needed trust," he said.

Write to Takashi Mochizuki at takashi.mochizuki@wsj.com

(END) Dow Jones Newswires

May 27, 2017 02:47 ET (06:47 GMT)