Sharp National Dealer Meeting: Foxconn Benefits, Smart Office, Smart MFPs, Smart Meetings, and More
Last week in Phoenix, Arizona, Sharp Information and Imaging Company of America (SIICA) held its national dealer meeting, which served as a forum for both the traditional rally-the-troops pep talk and new product introductions, as well as a forum to provide key updates on Sharp and SIICA since Foxconn’s purchase of a controlling interest in Sharp Corporation for $3.5 billion last year. Noting Sharp’s new access to Foxconn’s deep tech portfolio, SICCA President and CEO Doug Albregts began the conference confidently: “Foxconn’s investment in Sharp has changed the game….Sharp is the one company in our space that sees the future, because Sharp now has access to the best tech in the market today. Our competitors are simply document companies.”
The main themes of the conference included the benefits of Foxconn’s investment in Sharp; smart office technology; the need for Sharp office-imaging dealers to diversify; and how 5G connectivity and 8K video will be driving Sharp’s forays into business and consumer solutions. Last, but not least, new products were also big, with Sharp showing new business products in every category: A4 mono copier/MFPs, A3 mono and color copier/MFPs, displays, and software.
A Seat at the Foxconn Table and New Energy for Sharp
While a few years ago, Sharp appeared to be in some trouble, it now fortunately appears to be back on track. Although Sharp’s business-solutions group – copier/MFPs, meeting solutions, etc. – has generally always been profitable, back in 2015, Sharp Corporation of Japan as a whole began stumbling, with, for instance, the company reporting a net loss of $274 million for its 2015 first quarter, with Sharp saying it had been hit hard by sales declines in its electronics business, including lower demand for LCD televisions, smartphones, air purifiers, and smartphone displays.
Sharp’s turnaround since then was capped by Sharp Electronics Corporation’s Tetsuji Kawamura’s announcement on the last day of the dealer meeting that on December 7th, Sharp Corporation will be promoted back to the First Section of the Tokyo Stock Exchange, which requires that the company is completely independent from its parent company and is generating profit (Sharp was demoted to the Second Section back in August 2016). Sharp’s stock has since rose about 8 percent since the announcement.
SIICA’s Albregts emphasized throughout the conference that Sharp is a unique position in that it now has direct access to Foxconn’s technology and Foxconn’s robust procurement and manufacturing muscle. Foxconn is the world’s largest contract electronics manufacturer with clients like Apple, HP, and Google. “Foxconn’s investment in Sharp has changed the game,” noted Albregts. Foxconn of Taiwan making approximately 50 percent of the world’s electronics; it posted revenues of $136 billion in 2015.
Albregts emphasized that this will give Sharp business solutions group a unique advantage – “Sharp will be at the grown-ups’ table, while other copier makers will be at the kids’ table.” That means that Sharp will get a first-hand look at new Foxconn technology, with Foxconn exploring providing Sharp with its technology to develop smart-office products. Foxconn has other investments in the office space – such as Thecus, which develops network-storage devices (see below) – and Sharp will be able to access and sell many of these products.
Sharp’s new Skywell – an atmospheric water generator that creating water from air – is a great example of this. It’s being exclusively distributed by Sharp dealers, and can be monitored and serviced like a copier, generating after-sale revenue. The dealers we spoke to seemed receptive to it, and one dealer, Top Office People, uses it to “sell water like toner,” charging by the bottle of water generated by the system. It can also serve as an “in” for introducing Sharp copier/MFPs to the customer.
The big message for Sharp dealers? Leverage Foxconn’s manufacturing and procurement muscle and expand your product offerings.
On a much broader front, SIICA’s Albregts also took a long view of office-imaging – with the ultimate goal of helping Sharp dealers diversify, and for some, diversify even with the Sharp INTELLOS robot (below). Albregts also noted that SIICA would likely be acquiring dealers to grow, and is interested in acquiring managed IT companies: “Whatever we think we can expand our footprint, that’s whats we’re going to do.” “Foxconn has been more than generous with money. The smart office is our greatest opportunity. In the old environment, we weren’t flourishing. We were easy pickings.”
Sharp has over 100 dealers getting into new Sharp categories, with Sharp seeking to make diversification into new categories – such as video conferencing and document-management systems – easier for them.
While document-imaging revenue was down for the first half of Sharp’s fiscal year (April to September), unit shipments were up, but operating profit was flat. The fact that unit sales are up, but revenue is down, is a cause for concern, noted Albregts, and underscores a need to diversify. Sharp had a peak of 450 dealers, and now has approximately 300 dealers.
Growth now however is on the agenda, with Albregts noting: “We’re in the fifth or sixth position (in the copier market) and want to go to number-three by 2019, either by acquisition or from within…. We’re looking at anything for any acquisition, even a competitor. We’re continuing to push every opportunity. We want a larger footprint and larger end-user base.”