Japanese electronics giants Sharp and NEC are to create a joint-venture by combining NEC’s Display Solutions (NDS).
The pair say the joint ventire will allow both companies to build upon their strengths and address the visualisation needs of their global customers, and will help bring 8K+5G products to market.
The agreement sees NEC transfer 66 per cent of its NDS subsidiary to Sharp and where NEC retains a 34 per cent equity stake in the j-v.
According to Futuresource’s Worldwide Quarterly Tracking Services, in 2019 the brands had a combined volume share of 7.5 per cent in the LCD market, and 5.1 per cent in the projector market.
“NEC offers one of the broadest visual solutions portfolios in the industry, and with a consultancy-led sales approach, NEC is recognised as a trusted advisor and total solutions provider,” said Hisatsugu Nakatani, President, NEC Display Solutions. “This joint venture between Sharp and NEC Display Solutions will bring even greater value and benefits to customers and partners by extending our state-of-the-art product portfolios together with a range of professional service offerings. Sharp and NEC Display Solutions follow the same strategic approach to the future of visual solutions, focusing on superior customer satisfaction enabled by high quality products, sales leadership excellence and committed relationship building.”
“The combination of Sharp’s and NDS’ international strengths is mutually complementary,” said Fujikazu Nakayama, Senior Executive Managing Officer, Sharp Corporation and BU President, Business Solutions BU. “We expect this agreement to result in a wide range of synergies, including economies of scale and business expansion in new categories, including an 8K+5G Ecosystem. Sharp believes that developing NDS as a joint venture with NEC will contribute to our business growth by enforcing our BtoB business and expanding sales.”
Futuresource analysts say: “The merger of NEC and Sharps’ offerings will enable both brands to adopt this strategy more effectively; NEC’s consultancy-led sales approach will no-doubt provide more opportunities for Sharp’s high-end solutions. Whilst Sharp’s focus on innovation will enable NEC’s broad portfolio to focus more on the lucrative high-end niches.”
“In short, the joint venture will no doubt prove to be a positive one but the threats that led to its creation are only set to grow. Dynamics in the display industry are shifting rapidly and whilst this may lead to further mergers between Japanese, and even Taiwanese companies, brands must be able to react swiftly, or risk being left behind,” added Futuresource.