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On 100th birthday, Sharp seeks salvation in talking vacuums

Jay Alabaster | Sept. 18, 2012
It's probably fair to ask why Japanese electronics maker Sharp -- deep in debt and red ink, cutting workers and salaries, awash in excess inventory in the brutal LCD market -- is actively promoting a line of talking vacuum cleaners.

It's probably fair to ask why Japanese electronics maker Sharp -- deep in debt and red ink, cutting workers and salaries, awash in excess inventory in the brutal LCD market -- is actively promoting a line of talking vacuum cleaners.

But the company, which marked 100 years in business on Saturday, has always been willing to bet its future on unproven ideas.

Sharp was founded by a self-taught engineer, Tokuji Hayakawa, whose first invention was a clasping belt buckle in 1912. He lost the company once and after rebuilding it came close to losing it again several more times, and his approach was always to keep trying new ideas until something sold.

"Recessions are the best time to put yourself to the test. People come up with some good ideas when they are suffering," said Hayakawa, who died in 1980.

Tales of company founders are fraught with cliches, but this is Sharp's DNA. For every success the company has had in the last decade -- the first radio built in Japan, the first calculators to use LSI (large scale integration) circuits and LCD digits, the first camcorder with an LCD screen, the first consumer cellphone with a built-in camera, a long line of giant, record-breaking TVs -- there is a bizarre counterpart: a calculator with an abacus attached, a tabletop TV with back-to-back screens on the same tuner, a combination hairdryer/shaver, a refrigerator with a built-in microwave, and, of course, a line of talking robot vacuum cleaners.

The company is currently struggling to stay afloat after its over-investment in LCD panel manufacturing and is on track for over US$3 billion annual losses. Deeply in debt and facing a cash crunch, its credit rating has been cut to junk status and it has had to mortgage its buildings and factories for an emergency loan, as well as cut 5,000 workers and slash employee salaries.

It's difficult to see how Sharp can invent itself out of its current predicament, but the company plans to stick to its roots and try. The firm canceled all centennial celebrations in light of its financial woes, opting instead for a short address from President Takashi Okuda last week, who emphasized ingenuity.

"In an effort to find new, future avenues of growth, we will aim to be a company that creates lifestyles which change the way people live and do business, developing products from the point of view of our customers and producing new traditions and trends," he said.

In the meantime, Sharp is negotiating with Hon Hai, the Taiwanese parent company of Foxconn Electronics, for a much-needed investment in exchange for nearly 10 percent of Sharp's shares. A deal was announced in March, but then canceled after Sharp shares plunged in value, and Hon Hai chairman Terry Gou has recently taken a tough stance in negotiations, each bit of bad news from the Japanese side strengthening his position at the bargaining table.

 

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