Hisense To Acquire Sharp’s U.S. TV Business
Chinese TV manufacturer Hisense revealed early Friday that it is acquiring Sharp’s North and South American TV businesses for $23.7 million.
In a terse statement issued from Hisense’s headquarters in Qingdao, the company said it is purchasing all equity and assets of Sharp’s TV factory in Mexico and will gain the rights to use the “Sharp” brand name and all of its channel resources in the two regions.
The news was not exactly unexpected. Sharp Electronics, like many of its Japanese electronics counterparts, has struggled in recent years to make a profit from the highly competitive TV business. Continually lowering price points and demands to constantly deliver the latest and greatest technologies, have pulled down the company’s financial reports.
More on the acquisition of Sharp’s U.S. TV business after the jump:
Similar conditions forced Toshiba to exit the TV business in North America last year and license the brand to Compal Electronics. Earlier, Mitsubishi Electric had left the TV marketing business, following the lead of European manufacturers Philips (Philips and Magnavox) and Thomson SA (RCA), which have licensed their TV brands to Funai and On Corp., respectively.
In a statement on the deal, Sharp Electronics Marketing Co. of America (SEMCA) said it will conduct business as usual until Hisense takes over TV marketing Jan. 1, 2016: “Until then, we’ll 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.”
The company said it 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.
Sharp was established in 1912 as a manufacturer of mechanical pencils and evolved over the years into the world’s leading developer of large-format color TFT LCD screens, among other technologies. Its manufacturing plants in Japan have continually led the industry in the output of large-size mother glass used for LCD TVs and other products.
But financial pressures forced Sharp to exit the TV business in Europe last year, where it licensed the rights to the Sharp brand for TVs to Asian electronics manufacturer TPV. Sharp also ended TV marketing in Canada last year, and licensed a portion of its brand for lower-end TVs to big box retailer Best Buy in North America.
Ironically, Hisense is a leader in the wave of Chinese electronics manufacturers that have started to make a name for themselves in the U.S. electronics market. Its value-driven product lines, along with those of other Chinese manufacturers including TCL, Haier, Changhong and others, have intensified the pressure on established top-tier brands to lower prices for step-up feature sets.
This year, Hisense USA raised the bar by introducing a line of 4K Ultra HD TVs with full-array backlighting, advanced smart TV functionality and four-year warranties. Earlier it had teamed with set-top box IPTV maker Roku to produce a line of Full HDTVs with built-in Roku smart TV functionality.
Like Sharp, Hisense has long manufactured LCD panels and has built TVs as an original design manufacturer and original equipment manufacturer for a number of private label brands in the United States and elsewhere. Like other Chinese-based manufacturers, it has struggled to gain marketing traction using its own Hisense moniker.
Hisense was launched in 1969 as a radio manufacturer and gradually expanded its product mix to include: major appliances, TVs, PCs, tablets and other devices. It reported overseas sales revenue of $2.6 billion in 2014, reaching 130 countries.
The Hisense/Sharp deal is expected to help Hisense expand its market capacity to better serve both North and South America. Remaining to be seen is the go-to-market strategy the company will use to market both Sharp and Hisense TVs.
Sharp just launched its 2015 4K UHD TV lineup, including lines using the Android TV operating system.
Sharp Electronics Marketing Co. of America has been anchored by a seasoned team of consumer electronics marketing veterans with strong relationships in the CE retail community.
Hisense USA has also brought in some well-respected U.S. CE executives, but has juggled the marketing personnel and direction several times in recent years.
Stay tuned to HD Guru for further developments.
By Greg Tarr
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