LG.Sharp LCD?

The Washington Post is reporting that high-level Sharp executives visited LG.Philips LCD. Why? Philips is seeking a buyer of its 32.9% stake in its joint venture LG.Philips LCD (LPL). Philip’s 32.9% is a “non-core financial investment” and stated that the company would sell its stake over time. But there is a limitation: Philips agreed with LG Electronics to keep at least 30% of LPL until three years post IPO. That would make it around July 2007. Sharp visited LG.Philips LCD as well as LCD component suppliers. Hiroshi Takenami, Sharp’s spokesperson, stated that the report by the Commercial Times was untrue. This was also iterated by LGE and LPL.

Personally, I think if Sharp bought out Philips’ shares, it would be both good but pose a technical and therefore a marketing challenge. It would be good to establish a possible LG.Sharp LCD to combat S-LCD, a joint venture between Samsung and Sony. Because Sharp’s internal LCD manufacturing is always lacking capacity to completely support Sharp’s TV brand, for the first time, Sharp has had to procure panels from Taiwan. With LG.Sharp LCD, Sharp would have a very competent LCD manufacture without having to worry about LCD TV panel supply. The difficult part of the joint venture would be in the technology and therefore the marketing that results from it. Sharp’s LCD technology is based on vertical alignment (VA) whereas LPL is based on in-plane switching (IPS). The two technologies are so different, changing the technology base from one to the other would be out of the question. So, if Sharp procured LPL’s IPS panels, the marketing guys at Sharp would have a difficult time. LPL panels usually have less color shifting at angles compared to Sharp’s Advanced Super View (ASV, VA-based) but ASV panels typically have better contrast ratio in the very center of the screen. However, the technology differences can easily be overcome by establish a two-tier branding strategy by Sharp and with a steady supply of LCD TV panels from LG.Sharp LCD, Sharp can concentrate on building to compete against Sony and Samsung.

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