Sharp Spike in Sharp’s Prospects – Said to Working with Hon Hai on Apple iTV

Apple iTV Idea #3The Wall Street Journal is reporting today that unnamed sources are telling it that Apple has built and is testing a large screen, high definition television that it has worked closely with Asian suppliers to create. Most notably, these sources say that Apple worked closely with Hon Hai Precision Industry Co. (Foxconn) – it’s leading iPhone/iPad supplier – and Sharp Corp. – the troubled Japanese television company.

Will Apple’s iTV save Sharp?…

According to these sources, Hon Hai and Sharp have been working together on testing a television for Apple for months. However, one of the sources told WSJ that the company is only in the very earliest stages of testing at the moment.

“It isn’t even a formal project yet,” the source told the WSJ. “It is still in the early stage of testing.”

Is it an INny or OUTty?…

Apple usually tests product designs in-house at first, the Journal report indicates. The company would then typically move to testing with outside suppliers only when the project is progressing. This being the case, then the project has likely moved to a new level.

However, the WSJ article notes that Apple has been testing television designs…for years. So this news does not necessarily mean the company is close to introduction. And the dismal results of Apple competitor Google with its Google TV is likely a cautionary tale for the company.

Smart like a FOXconn…

Still, reliable partner Hon Hai, whose chairman Terry Gou bought a 37.6% share of a Sharp LCD factory that produces 60-inch and larger panels, seems to be signalling that something is afoot. Fine-tuning its TV-manufacturing chops, Hon Hai is now producing 60-inch televisions for Vizio at that same Sharp factory.

Photo of slide of Sharp factory.

Apple wowed the consumer electronics industry years ago when it entered the personal music player space – at the time dominated by the Sony Walkman – with its first iPod. But the key to the iPod’s success, was its tight integration with Apple’s iTunes music distribution system. Apple was able to squeeze significant concessions out of the record industry, to ensure easy downloading and full compatibility with the iPod’s operating system.

Play it again, Sam…

When Apple decided to enter the mobile phone market, they followed the same playbook. Prior to the Apple iPhone, the major cell service companies dictated what their systems could do and how they would operate. In order to gain Apple’s business, AT&T agreed to major modifications to their service driven solely by Apple, who sought to have a seamless integration between the service and the hardware.

However, Apple has not been so lucky in convincing cable operators to play ball the Apple way. CNBC reported today that its reporters have spoken with almost all of the top cable companies and Apple has made no headway with any of them. CNBC hosts speculated that – unlike the record industry or cell phone industries – most cable companies are very strong and would not be bullied by the new non-Jobs Apple.

Not this time!…

“They watched Apple take ownership of the customer [in the other industries]…they won’t let that happen to them,” said one of the CNBC hosts.

This position is supported by the Journal’s reporting: “Plenty of hurdles remain. Apple doesn’t appear to have any deals with operators to sell such a device and getting them on board is likely to be challenging. The relationships between Apple and cable companies and content owners are tense.”

Could be now, or later, or even later than that…

Separately, many media are quoting technology industry kingpin Marc Andreessen – one of Silicon Valley’s leading venture capitalists who is said to be very plugged into everything going on in the Valley. Andreessen is saying that Apple’s iTV may happen in 2013, but 2014 or even 2015 is more likely. Still, when they do enter the business, Andreessen says, it will spike competition with companies likely to copy Apple’s approach which undoubtedly will be superior to what’s being offered now.

No matter when the time comes, if Apple does successfully launch iTV, and Sharp is confirmed as a significant supplier – this could be just what the doctor ordered to save the troubled company which has been struggling to survive…forced to beg for money from multiple new partners.

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