Although neither company has been a huge factor in the U.S. TV market under their respective brands for the past few years, Japan’s NEC Corp. and Sharp Corp. announced their intentions this week of forming a joint venture that will combine NEC Display Solutions, Ltd. (NDS), a subsidiary of NEC, with Sharp, which is now majority controlled by Taiwan’s Foxconn.

In the U.S., NEC is known mostly as a brand for commercial video displays and projectors, while the Sharp brand for TVs was licensed to China’s Hisense for U.S. sales until Hisense agreed to release the license back to Sharp Corp. this year. For now, the brand is currently still used under license in the United States for select Roku TVs sold primarily through Best Buy stores, but is expected to shift back to Sharp Corp/Foxconn control this year .

Sharp is also known on a broader scale around the world as a supplier of business products, including professional and commercial displays, and advanced technologies including 8K-Ultra High Definition monitors. Sharp Corp. plans to resume marketing advanced televisions aimed at consumers under the Sharp brand in the United States in 2021, executives said at CES 2020.

According to Futuresource’s Worldwide Quarterly Tracking Services, in 2019 the brands had a combined volume share of 7.5% in the LCD market, and 5.1% in the projector market.

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According to a statement announcing the joint venture plan: “NEC offers one of the broadest visual solutions portfolios in the industry, and with a consultancy-led sales approach, NEC is recognized as a trusted advisor and total solutions provider,” said Hisatsugu Nakatani, president of NEC Display Solutions, Ltd. “This joint venture between Sharp and NEC Display Solutions will bring even greater value and benefits to customers and partners by extending our state-of-the-art product portfolios together with a range of professional service offerings. Sharp and NEC Display Solutions follow the same strategic approach to the future of visual solutions, focusing on superior customer satisfaction enabled by high-quality products, sales leadership excellence and committed relationship building.”

“The combination of Sharp’s and NDS’ international strengths is mutually complementary,” said Fujikazu Nakayama, senior executive managing officer at Sharp Corp. and Business Solutions Unit. “We expect this agreement to result in a wide range of synergies, including economies of scale and business expansion in new categories, including an 8K+5G Ecosystem. Sharp believes that developing NDS as a joint venture with NEC will contribute to our business growth by reinforcing our B2B business and expanding sales.”

According to the joint venture announcement, NEC will transfer 66% ownership of NDS to Sharp, and retain a 34% equity stake in the business. The joint venture will continue to provide NEC branded products. NEC will also continue to sell the joint venture’s products and solutions to its customers around the world. The transfer is scheduled to be concluded on July 1, 2020.

Commenting on the merger, Futuresource released an advisory stating that “competition is moving west from Korea to China, with domestic Chinese brands now presenting the most significant threat due to their low price-points. The only option for brands not in a position to fight on price is to focus on the customer by incorporating relationship building into their sales approach, providing high-quality products and offering superior aftersales services.

“The merger of NEC and Sharps’ offerings will enable both brands to adopt this strategy more effectively; NEC’s consultancy-led sales approach will no-doubt provide more opportunities for Sharp’s high-end solutions. Whilst Sharp’s focus on innovation will enable NEC’s broad portfolio to focus more on the lucrative high-end niches.”

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By Greg Tarr

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