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Apple bailed out Sharp to the tune of $2bn last quarter: analyst | 234 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Apple bailed out Sharp to the tune of $2bn last quarter: analyst
Authored by: JimDiGriz on Thursday, November 08 2012 @ 06:35 AM EST
http://www.zdnet.com/apple-bailed-out-sharp-to-the-tune-of-2bn-last-quarter-anal yst-7000007092/

Television and display maker Sharp is in serious trouble, with crushed profits and huge losses hanging around the company's neck like a lead weight. But one analyst suggests that Apple used its massive cash pile to make sure the company survived to deliver parts for the new iPhone 5.

Apple and Sharp have been thrown together thanks to the ongoing legal feud between Apple and Samsung. Apple, wanting to lessen its reliance on Samsung, turned to Sharp for displays for its new iPhone. But huge problems at the company had put the delivery of these screens in jeopardy.

Enter Apple and its massive $100 billion plus cash pile.

Asymco analyst Horace Dediu suggests that Apple may just have pushed over $2 billion to Sharp during the last quarter to ensure that the supplier survived. Digging through the financial data, Dediu points to expenditures at Apple that were over $2.3 billion higher than forecast. Dediu also found that Apple paid for some of its acquisitions "through uncharacteristic or unorthodox means."

Apple put the spending down to "product tooling, manufacturing process equipment, and infrastructure," but Dediu's theory is that at least some of that money went to Sharp.

He noted:

Circumstantial evidence points to the asset being production equipment (or even a whole plant) previously owned by Sharp," Dediu said. "Sharp is a key supplier of screens to Apple but is also in financial distress. Sharp has also been the object of an intended investment by Foxconn [Hon Hai]. That deal fell through as Sharp's finances deteriorated. My guess is that these attempts to shore up Sharp are directed by Apple to ensure both continuity of supply and a balanced supplier base (offsetting Samsung, another supplier).

Dediu points out that if Sharp had entered into bankruptcy, it's quite possible that its production plants could be grabbed by creditors and shut down, irrespective of any deal with Apple. If this had happened it could have resulted in the iPhone 5 being delayed, something Apple would have wanted to avoid at all costs.

[ Reply to This | Parent | # ]

Recall that Apple wanted Samsung to commit
Authored by: SpaceLifeForm on Thursday, November 08 2012 @ 02:22 PM EST
Apple tried to convince Samsung to dedicate a bunch
of fab production dedicated to Apple.

Samsung smartly did not commit especially when
you consider that Apple sales are not cutting it.

This should not imply that Samsung should abandon
building a plant in the US, it just could mean that
Samsung is not going to dedicate production to Apple.

Which would explain why Apple wants Sharp to help.


---

You are being MICROattacked, from various angles, in a SOFT manner.

[ Reply to This | Parent | # ]

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