How Foxconn's Acquisition Of Sharp Has Put Them Back Into The Black

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How Foxconn's Acquisition Of Sharp Has Put Them Back Into The Black

 news 2018-02-06 at 12:35:09 pm Views: 268
  • #49759

    How Foxconn's Acquisition Of Sharp Has Put Them Back Into The Black.
    Earlier this month, Sharp Electronics hosted channel partners at its European dealer event, Sharp Inspire, in Edinburgh. It was a comeback of sorts for the Japanese firm following a recent history marred by financial problems.
    By Christine Horton.
    Related image

    Sharp talked up how its 2016 acquisition by Taiwanese electronics giant Foxconn has breathed new life into the company, and went all out to demonstrate how it's now placing R&D and innovation at the heart of its product roadmap.

    "Sharp had been in financial difficulty worldwide; for many years it was just troubling news coming out of Japan. I think a lot Japanese companies got into those sorts of positions, Sharp wasn't alone," Stuart Sykes, managing director, Sharp Business Systems UK, tells Channel Pro.

    It was a question of timing. Sharp had invested heavily in the manufacture of consumer goods in a market that came to be dominated by South Korean titan Samsung.

    "With Foxconn coming along and the company's finances now being healthy, it gives the company a completely different outlook, in terms of investment, and what's possible in the future – to invest in dealers and make acquisitions on the direct side. That's all now back on the table."

    The company has made strides in the last few years to create an even split between channel and direct sales – a step away from its traditional multi-function printer devices (MFPs) business that was dominated by channel sales.

    "It was Sharp's acquisition strategy across the whole of Europe," explains Sykes. "Traditionally Sharp was 80-90% through the channel in the MFP space, and it was a conscious decision to acquire more direct business."

    In the UK, Sharp has made three channel acquisitions over the last five years: Copifax, Copy IT, and Midshire in 2017 – and Sykes says further acquisitions are on the cards, thanks to Foxconn's backing.

    "In the UK we would like, going forward, to change our business, and one of the ways to do that is by acquisition, bringing in extra resources, extra skills sets," says Sykes. "We're looking at both MFP businesses and, outside of that space, to supplement what we do, so at the moment anything's on the table."

    Sharp currently has 112 dealers in the UK, of which 40-50 are active. Sykes says the "multi-channel strategy" is embedded in the sector, and Sharp isn't "alone in that strategy."

    "We're very open with our dealer channel and they knew that's where we were going," he notes.

    One of the most noticeable shifts in Sharp's product strategy, highlighted at the event, is an emphasis on solution selling, rather than leading a sale with print.

    "We are in a changing landscape and print is a very mature sector, very commoditised and our dealers would say it's really tough. Customer demands are changing – they want to see integrated solutions from a supplier."

    He says Sharp's messaging to its channel is that "we have the components of more integrated offerings for your customers, and you decide what's right for you — visual solutions, systems solutions, software, workflow, etc. Our proposition is that we can provide you with these different technologies now through Foxconn".

    Sykes does recognize the challenge this transition poses to many traditional print dealers.

    "I can't say everyone's up for the change – there are still some who say they still have a lot of MFP growth that can be achieved. So it's a progression," he says. However, he adds that he is "amazed" at the journeys some dealers' are already undertaking.

    "Many have already set up some sort of IT service offering, or they're heavily in certain workflows into certain verticals."

    According to Sykes, its partners are delighted with the changes Sharp has made and can look forward to renewed investment in developing both the vendor's core print and AV portfolio, as well as a range of products that embrace emerging technology such as Artificial Intelligence (AI) and the Internet of Things (IoT).

    Given this new push, one observer believes the event was an opportunity for Sharp to test the waters with its channel partners.

    With AI and IoT offerings in the works, collaboration solutions and a focus on the 'Smart Office', Sharp says it's ready to show the channel that its problems are consigned to the past, and as a company, it's ready to spend to grow.
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