updated 07:45 pm EDT, Fri April 13, 2012
Foxconn stepped in instead, says analyst
On the heels of the news from last month that Foxconn had bought a 46.5 percent stake in Sharp's LCD business, analyst Brian White with Topeka Capital Markets say that Apple "debated" buying a share of Sharp itself. White says his information comes from a technology trade show he attended in China, and tells his investors that the story indicates that Sharp's IGZO technology has been deemed important for Apple's future plans.
Though based on hearsay, such a strategy is plausible, as it would allow Apple to mask the extent of its planned involvement with Sharp for future products. Sharp announced earlier today that it has begun production on IGZO (indium gallium zinc oxide) based LCD display panels, which are said to be thinner and significantly more power-efficient than existing LED-backlit LCD technology.
Initially the facility will produce sizes for smartphones and tablets, but is also said to be working on larger displays for products such as HDTV units. Thus far, Sharp's LCD division has not turned a profit, and the company may be pinning its hopes on IGZO to revive the fortunes of the LCD segment of the company.
Foxconn has a vested interest in investing in Sharp if it believes Apple will be utilizing IGZO displays in future products, as the investment gives it access to the technology and a strong incentive for Apple to maintain the lucrative relationship between the two. Apple already has an alleged relationship with Sharp, who are said to be an alternative supplier producing traditional LCD panels for the current iPad line.
"In our view, if Apple was willing to consider investing in the supply chain to exert influence in an area deemed important to the company's future, we wonder what else the company might consider," White said. He went on to suggest that Apple may choose to get more involved in its own supply chain in various ways to further assure reliability, secure long-term supplies and to give suppliers an incentive to maintain high standards of worker safety and satisfaction.
"With growing concern around treatment of workers at Apple's suppliers and heightened media coverage, we believe one option for Apple to better control the worker controversy is to have an Apple executive on the board of directors of certain suppliers and help manage the situation," White told investors, according to AppleInsider. "This would send a clear message that Apple is deeply concerned with the treatment of workers at suppliers." [via AppleInsider]