Chinese tech conglomerate Foxconn Group is seeking to transform Sharp into one of the largest smartphone makers on the planet, local media outlet Economic Daily News reported on Monday. The two have supposedly reached a preliminary agreement that would see them create a venture with more than 4,000 employees tasked with creating, testing, manufacturing, distributing, and promoting contemporary smartphones, in addition to handling their after-sales support. The report didn't clarify whether the initiative is meant to take the form of a joint venture or if Sharp would simply expand its existing mobile division with an investment from Foxconn.
The agreement itself was supposedly confirmed by Luo Zhongsheng, Sharp China's mobile chief and an executive director at FIH Mobile, Foxconn's product development subsidiary who presently manufactures Nokia devices designed by HMD Global and also bought a portion of Microsoft Mobile's feature phone unit last year, including Microsoft Mobile Vietnam. Mr. Luo was cited by Chinese media as saying that Sharp would initially increase its focus on China before possibly setting its sights on the global market. The company is also presently developing a new lineup of relatively bezel-free smartphones presumably running Android, with Mr. Luo indicating that the new series will be launched in China at some point in the future, though it remains unclear whether the newly introduced AQUOS R Compact is to be part of the collaboration. The first concrete steps in Foxconn and Sharp's partnership are likely to be taken in 2018, as suggested by the executive who didn't elaborate on the matter.
Even if Sharp doesn't make a major global smartphone push in the short term, China could by itself significantly improve the company's overall performance, with the Far Eastern country being the largest handset market on the planet. The partnership will presumably see Foxconn manufacture some of Sharp's products in its numerous factories throughout China but the Taiwanese tech giant has yet to confirm the deal in an official capacity. Foxconn — who also manufactures Apple's iPhones — recently bid for a stake in another major Japanese business when Toshiba put its NAND memory unit for sale. Despite launching the largest of the three offers for the division, Toshiba accepted a smaller bid from a consortium led by Bain Capital after some Japanese government officials reportedly signaled that they aren't keen on approving a sale to a company with such close ties to China.