Sharp America has sold its TV assets to Chinese TV manufacturer Hisense, in a move which sets the stage for the major realignment of the global television industry. On Friday, July 31 Hisense confirmed the purchase of “all equity and assets of Sharp’s TV factory in Mexico for US$23.7 million with rights to use the Sharp brand name and all its channel resources in both North and South American regions.”
Sharp US followed with a statement, “Sharp Corporation has agreed to sell its stake in its TV manufacturing facility in Mexico and enter into a brand licensing agreement with Hisense for consumer TVs in the Americas beginning January, 2016.”
“Until then, we will continue to manufacture and sell our current line-up of Aquos TVs and fully support sell-through into Q1 of 2016 with our channel partners. Customers should be assured that Sharp will continue to provide both in-warranty and out-of-warranty service and parts availability for years to come on these products.
“Sharp Electronics will continue to grow and invest in its line of consumer home appliances including microwave ovens, air purifiers and the recently launched Tea- Ceré Matcha brewing appliance. Also unchanged, is the sales and marketing through authorized distributors of Sharp’s entire B2B product portfolio, including displays, for business and commercial applications.”
The strategy behind the Hisense move is clear: in the US, the market is dominated by Samsung, LG and Sony and the Hisense brand has struggled to make headway.
Meanwhile, Sharp has been gradually losing market share in the US in recent years, while Hisense has been aggressive in its development of 4K and OLED models. Hisense now has a legacy brand to leverage its technological advances against, a strategy that should sit well with US retailers.
The acquistion of the Sharp brand by Hisense echoes the strategy that Haier used as it gradually consumed the local Fisher & Paykel brand. Both Hisense and Haier have found resistance in local markets to a negative consumer perception of Made in China. Poorly performing, but well-known brands present an ideal solution to this problem.
While there appear to be no plans yet for Hisense (which opened locally in 2006) to absorb Sharp’s Australian operation, some seasoned observers suggest it will only be a matter of time.