Nations and mega corporations are locked in a tug of war over the $5 billion prize Sharp Corporation and its patent portfolio.
Of particularly hot interest to Apple and the world is organic light-emitting diode (OLED) technology, of great value to Apple for the next generation iPhone. OLED displays are lighter, thinner, and more flexible than conventional LCD displays. Brightness is excellent. Cost is coming down. Display angles are better. Power savings are possible.
OLED displays are lighter, thinner, more flexible
Sharp, the electronics maker based in Osaka, Japan, employs about 50,000 people. It’s in financial trouble, and it’s up for sale.
Welcome to Pacific Rim
It’s a five way contest, at least, between U.S. Apple, Korea’s Samsung, Taiwan’s Foxconn, Japan Inc. and China Inc. Welcome to the Pacific Rim.
Samsung and LG, both Korean companies, have invested heavily in OLED technology.
Apple has resisted the move to OLED, but it is coming around. Next gen iPhone will use OLED. We will buy it.
iPhone will use OLED
Who will make the OLED displays for Apple? And what patents will dominate?
As of early this morning, Taiwan’s Foxconn, formerly known as Hon Hai, was winning the contest to acquire Sharp, according to many news reports.
Taiwan supplies Apple
Foxconn is Apple’s largest supplier. If Foxconn wins Sharp, it will make OLED displays for Apple.
Who’s bidding against Foxconn? The main rival is a Japan government-backed corporation, in other words, Japan Inc.
Japan’s industry, tech and otherwise, is notoriously insular. Japan will not give up the prize easily.
Late this morning, Foxconn is reported to be backing off, deterred by new revelations of previously undisclosed Sharp debt said to be in the “hundreds of billions of yen.” See Foxconn deal for Japan’s Sharp in doubt after last-minute hitch (Reuters 2/25/16).
Neither Sharp nor Foxconn are commenting.
Not so fast, says Japan Inc.
Where did the Sharp debt come from? No one is saying, but my pick is the Government of Japan. It may be that Japan has “just remembered” that it has its hooks in Sharp. It will not lightly let go of the prize.
Jump and stay in the lead
The take-away message for tech CEOs is this: When you’re locked in a contest over a hot new technology, you’d better jump and stay in the lead, and protect your rights with patents. Billions of dollars are at stake.