Apple supplier collaborating with Sharp on new TV: report

iPhone, iPad manufacturer in talks with Sharp for potential television production

The Wall Street Journal reports that two sources within Hon Hai Precision Industry Co., which assembles Apple’s iPhone and iPad mobile products, say the company has been consulting with television and large display manufacturer Sharp on a new Apple TV.

Hon Hai operates its Taiwanese manufacturing facilities under the more recognisable name of its subsidiary Foxconn.

Rumours of an Apple television have been swirling for years, intensifying in the last twelve months. The biography of company founder Steve Jobs, released after his death in October 2011, noted that the iconic innovator believed that he had a ground-breaking innovation for the television interface: “It will have the simplest user interface you could imagine. I finally cracked it.”

This Apple TV rumour has been recycled in the past few days, weeks, and months before now, from the same mill of anonymous sources and accidental leaks that is responsible for largely accurately predicting the development of the iPhone 4, iPhone 4S and iPhone 5, as well as various iPad models and the iPad mini.

Sharp is a logical choice for Apple to supply large-screen panels for a potential TV. The company already has an existing partnership to supply displays for the iPhone 5 and other Apple products. It has an excellent reputation for the picture quality of its LED-backlit LCD televisions, producing Sharp AQUOS-branded televisions worldwide as well as reviving the high-end Elite brand in North America in partnership with Pioneer. Japanese stablemate Sony ended a partnership with Sharp in May that saw it use the company’s LCD panels for its BRAVIA LED TVs.

Like its competitors Sony and Panasonic, Sharp is in dire financial straits, recently reporting massive negative profits on its LCD panel business. The price of LCD panels has dropped hugely and at an increasing rate since the start of the new millenium — a 40-inch LCD panel which was worth $2,700 in 2004 is worth no more than $250 today.

Credit agency Fitch cut the company’s profitability rating to junk status in November, following a similar move by Standard & Poors in August. The credit agency released a speculative statement expressing doubt about the company’s future: “Fitch does not foresee any meaningful operational turnaround in the company's core business over the short- to medium-term.”

Profitability notwithstanding, a focus on screens larger than the 50- and 55-inch sizes considered standard means Sharp is ideally positioned to supply televisions for a premium and exclusive Apple product. The company has also invested resources in smaller screens using experimental IGZO technology, creating a 32-inch Ultra High-Definition panel. Other large-scale LCD manufacturers are Samsung, with which Apple has a tumultuous relationship, and competitive Korean chaebol LG.

Hon Hai Precision Co chairman Terry Gou said that the Taiwanese company was still on track to make a massive investment in Sharp, with a forecasted 9.9 per cent stake purchase in the embattled Japanese producer set for approximately March next year. If it eventuates, this move will solidify Sharp’s shaky operating future, as well as further fuel rumours of an Apple-Hon Hai-Sharp collaboration on televisions and other display devices.

Apple CEO Tim Cook recently confirmed that an Apple TV was “an area of intense interest”, telling NBC “When I go into my living room and turn on the TV, I feel like I have gone backwards in time by 20 to 30 years.”

This new, hypothetical Apple TV is different from the Apple TV set-top box that has been sold worldwide since March 2007. If the big-screen product is ever officially announced, it’s unlikely to be called the Apple TV for fear of confusing buyers, and it’s unlikely to be called the iTV, at least in the UK.

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