Sharp Electronics Corporation

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Sharp Electronics Corporation

founded: 1962

Contact Information:

headquarters: sharp plz.
mahwah, nj 07430 phone: (201)529-8200 fax: (201)529-8425 url: http://www.sharp-usa.com

OVERVIEW

Sharp Electronics Corporation is the U.S. subsidiary of Japan's Sharp Corporation, one of the world's largest electronics manufacturers. Sharp is well known to consumers as the makers of notebook computers, microwave ovens, televisions, vacuum cleaners, fax machines, and numerous other electronic products. Sharp is also a technology leader in the liquid crystal display (LCD), opto-electronics, infrared, and semiconductor fields.

COMPANY FINANCES

For the fiscal year ended March 31, 1997, Sharp Corporation (Sharp Electronics' parent) recorded an 8.5-percent increase in sales to $14.5 billion from sales of $13.2 billion in 1996. With sales in 1993 of $12.26 billion, in 1994 of $12.34, and in 1995 of $13.15, Sharp showed an increase in sales for the fourth consecutive year. Net income rose 7 percent in 1997 to $394 million.

ANALYSTS' OPINIONS

In late 1997, Sharp Corp. was generally out of favor with the investment community. As David P. Hamilton wrote in The Wall Street Journal, some analysts were saying that "its once lucrative franchise in flat panels is aging, its product line-up isn't as exciting as it once was, and it's unclear whether the company knows what to do." Analysts were particularly concerned about competition in the company's flat-panel business, where it now faced significant competition from many other big electronics manufacturers.

HISTORY

Sharp Electronics can trace its roots to a business started in 1912 by inventor Tokuji Hayakawa of Osaka, Japan. The business was called the Hayakawa Metal Industrial Laboratory. In 1915, Hayakawa began producing a successful mechanical pencil called the "Ever-Sharp." In the 1920s and 1930s the company focused on making radios. In 1942, the company was renamed Hayakawa Electrical Industries. When the company began making television sets in 1953, it named its brand "Sharp" after the popular pencil.

In 1962 the Sharp Electronics Corporation was organized in New York as the company's U.S. sales subsidiary. By the late 1960s, the Sharp name was well established in the United States. Tokuji Hayakawa retired in 1970, and in the same year the parent company was renamed the Sharp Corporation. Sharp continued to grow and prosper in the 1970s and 1980s and remains one of the leaders of the electronics industry.

STRATEGY

Sharp produces both finished electronic goods for consumers and the key electronic components used to make them. One strategy of Sharp is to boost demand for entire product categories, which, in turn, increases demand for the components it makes. For example, in 1992 Sharp replaced the tiny viewfinder in camcorders with an external, liquid crystal display (LCD). This innovation allowed users to see what they were shooting without squinting into a lens. It proved so successful that competitors rushed to put LCDs in their own camcorders. Many of these LCDs came from Sharp, the world's leading LCD maker. Thus Sharp increased sales from both consumers and its competitors.

Sharp's strengths in both LCD and consumer electronics support each other in another way. The company can invest heavily in LCD technology because it can spread its investment over so many products—everything from projection systems and instrument panels to video recorders and personal digital assistants (PDAs). Its display technology gives it an advantage in developing new products and has often made it the trendsetter for the industry.

INFLUENCES

In the late 1950s, Sharp was an assembler of televisions and radios, and it was clearly in the second tier of Japanese electronic companies. To become one of the top-ranked firms, Tokuji Hayakawa created a corporate research and development (R&D) facility. Sharp wanted to make computers, but the Japanese Ministry of International Trade and Industry (MITI) blocked its efforts. So Sharp used its limited technology to develop one of the world's first digital calculators in 1964. To strengthen its position in this business, it eventually began to manufacture its own specialized semiconductors and made a strong commitment to LCD technology.

Hayakawa recognized that the United States was an important potential market for his company's products. Sharp Electronics, the U.S. sales subsidiary he established in 1962, helped the company increase sales in America. By the late 1960s, the Sharp brand name had become well established in North America. Having a U.S. subsidiary also allowed Sharp to observe the needs of the U.S. market and determine what products would sell well in America.

During the 1970s, Sharp continued to consolidate its market position in the United States. It broadened its line of consumer goods to include a wide range of offerings. These included refrigerators, washers, portable stereos, copiers, desktop computers, video equipment, and Walk-man-type headsets. Notable product introductions in the 1980s included one of the world's first combination personal computer/television sets and a revolutionary "lunchbox" computer in 1985, a forerunner of today's laptops.

FAST FACTS: About Sharp Electronics Corporation

Ownership: Sharp Electronics Corporation is the U.S. subsidiary of Sharp Corporation of Japan.

Officers: Toshiaki Urushisako, Chmn. & Pres.; Barry Kay, CFO

Employees: 2,300

Chief Competitors: As one of the major electronics manufacturers, Sharp Electronics competes against such rivals as: Hitachi; Pioneer; Matsushita; Philips; Sanyo; Samsung; and Sony.

As indicated in the Strategy section, a key to Sharp's success has been its success with LCD technology. Sharp produced the world's first electronic calculator with LCD in 1973. Its continuing refinement of LCD enabled it to use the technology as a springboard for developing new products. Besides calculators, LCD technology has been used in display screens for electronic organizers, camcorders, color monitors, projection systems, and color notebook computers. In 1996, Sharp Corporation claimed one-third of the global LCD market, which was worth $6 billion.

CURRENT TRENDS

In the mid-1990s, Japanese electronics makers faced significant challenges in their traditional consumer businesses. It had become difficult to squeeze additional growth out of such blockbuster products as television sets, audio systems, and video cassette recorders. Sharp Electronics itself was facing increased competition in its core flat-panel business, which used thin-film transistor liquid crystal display (TFT-LCD) technology. Prices in this market remained soft in late 1997 because of over capacity.

In the search for new markets, many of the electronics makers were turning to multimedia development. Sharp was no exception to this trend. Some major electronics makers, such as Sony and Matsushita, had purchased major U.S. studios to help their multimedia efforts. Sharp wanted to avoid the financial problems these companies had encountered when they entered the movie business. In October 1995, the company established the Multimedia Development Center at the New Jersey headquarters of Sharp Electronics. The Center's mission is to lead product planning in all areas where Sharp has competence, including the company's strengths in LCD, lasers, miniaturization, and flash memory. The Center was expected to have complete responsibility for product planning, from initial design to the delivery stage. It also included a market research group called the Creative Lifestyle Focus Center. Management has said it intends to concentrate on hardware while seeking partners for software development.

Sharp located the center in the United States because new multimedia technologies usually take root in America before spreading to other countries. Basing product development in the United States marks a sharp departure for Sharp Electronics. In the past, the U.S. subsidiary has only written specifications for the regional market—products were first developed for Japanese consumers and brought to North America afterward.

Aiding the multimedia effort will be Sharp Laboratories of America (SLA), which was set up in May 1995 to help bring the company's Japanese technology closer to the United States. Several months later, SLA moved into a new research facility in Camas, Washington, with 30 professionals. Sharp Electronics has also opened a major notebook production facility in Camas.

CHRONOLOGY: Key Dates for Sharp Electronics Corporation

1912:: Tokuji Hayakawa establishes a metal works plant in Japan called Hayakawa Metal Industrial Laboratory
1915:: The Ever-Sharp mechanical pencil is introduced
1925:: Begins focusing on the manufacturing of radios
1942:: The company is renamed Hayakawa Electrical Industries
1953:: Begins making television sets using the same brand name as it did for the pencils—Sharp
1962:: Sharp Electronics Corporation is established as the U.S. subsidiary of Hayakawa
1966:: Develops the world's first microwave oven with a turntable
1980:: Introduces the first front-loading VCR
1990:: Develops the world's first 4- and 5-inch color liquid crystal display televisions
1992:: Intel and Sharp form a joint venture to develop flash memory products
1994:: Sharp Develops Viewcamteleport, which transports video images over phone lines
1996:: Introduces the first wide screen notebook computer

PRODUCTS

As the U.S. subsidiary of one of the world's leading electronics manufacturers, Sharp Electronics is constantly introducing innovative consumer products. One such offering introduced in 1996-1997 was the Zaurus PC Companion, a portable organizer. The Zaurus weighs less than a pound and has a wide range of capabilities, including e-mail, word processing, spreadsheet, fax, 100-hour battery life, direct printing (without using a PC), digital ink (for capturing signatures), and many other features. Zaurus models were already a big hit in Japan in 1996, and in 1997 the company was hoping to duplicate that success in the United States. However, some observers thought a new line of palmtop PCs that run on a version of Microsoft Windows would provide stiff competition.

Another product innovation in this time frame was the WideNote notebook computer, featuring a wide screen and weighing only 4.6 pounds. The wide-screen format allows users to see more information—for example, more cells in a spreadsheet. It also makes it possible to display more than one window conveniently. The computer has multimedia capability, with small stereo speakers on the body just above the keyboard.

In 1997 Sharp Electronics launched its fifth generation of Viewcam camcorders, with 3- and 4-inch view screens. New features of its Viewcam line included high zoom ratios, a 90-minute battery with all models, and a smaller and lighter chassis. The company also introduced new TV models ranging from 13 to 36 inches. Other new offerings include TV-VCRs, compact and mini stereo systems, and VCRs.

GLOBAL PRESENCE

Worldwide, the Sharp Corporation of Japan has 67 facilities in 32 countries. As part of this global organization, Sharp Electronics is primarily concerned with selling Sharp products in the United States. While the basic design of electronic products is often the same in various countries, cultural differences sometimes call for modifications. For example, when Sharp introduced the Zaurus PDA in Japan, it included a pen stylus; there was no keyboard because most Japanese executives disliked them. Most Americans, however, use keyboards, so the North American versions have them.