Sharp Plans Elliptical Screens as China Mobile Demand Rises

Sharp Corp. is developing flat-panel displays in different shapes as it wins orders from Chinese smartphone makers including Xiaomi Corp.

The new technology reduces the size requirements for a screen’s outer edge, allowing for non-rectangular designs including elliptical shapes, the company said in a statement today. Sharp is spending more than 35 billion yen ($343 million) expanding panel output as it taps demand for producers such as Xiaomi, which outsells Apple Inc. in China and is entering 10 more international markets.

“The high-end smartphone display market is growing in China, with the speed of growth outpacing developed countries by about four times,” Sharp Executive Director Kazunori Houshi said in Osaka today. “We are now the first-tier supplier to seven Chinese smartphone makers, and we are planning to add up to six more this fiscal year.”

ZTE Corp., Lenovo Group Ltd. and Xiaomi are among Chinese manufacturers turning to high-end liquid-crystal displays to challenge Apple with devices boasting a longer battery life and sharper screens. Sharp forecast profit would more than double this year as it ramps up sales of devices using its IGZO technology, which consumes less power than conventional panels, and reduces its reliance on the iPhone maker.

Sharp rose 1.6 percent to close at 314 yen in Tokyo trading, paring its decline this year to 6 percent. The benchmark Topix gained 0.9 percent today.

Chinese Demand

“There’s rising demand for Sharp’s high-end panels from Chinese smartphone makers,” Yoshiharu Izumi, a Tokyo-based analyst at Navigator Platform Co. said by phone. “The Chinese demand is filling in Kameyama No. 2 plant’s capacity, where orders for iPad panels is not growing much.”

Xiaomi is accelerating its own expansion to meet its goal of tripling phone shipments to 60 million this year. The company keeps costs down by selling directly to consumers online, and Lei Jun, its founder and chief executive officer, has set a goal of boosting sales to 100 million phones next year.

When the company began selling smartphones in Singapore this year, each batch sold out in just a few minutes. The company is adding sales in five other Asian markets as well as Turkey, Mexico and Brazil this year.

Top Level

Chinese manufacturers are luring buyers with high specifications. Xiaomi’s Mi3 smartphone with 16 gigabytes of memory sells for 1,499 yuan ($241), or about a third the price of Apple’s iPhone 5c. Compared with the 5c, for example, Mi3 has a larger, sharper screen; a camera with higher-density pixels; and speedy quad-core processors from Nvidia Corp. or Qualcomm Inc.

“Sharp screens are the top-level screens,” said Joy Han, a Beijing-based spokeswoman for Xiaomi. “We don’t want to compare Sharp’s panels to other makers, we just say Sharp’s panel is the world’s top screen.”

Han declined to comment on specifically which Xiaomi models use Sharp screens now, or what plans the company has to add to other models going forward.

Sharp has 10 primary China customers and more than 75 percent of orders from Chinese mobile manufacturers are for the high-end panels, the company said last month. Smartphone shipments in China rose 31 percent in first quarter compared to a year ago, according to IDC data compiled by Bloomberg.

“It’s important in the smartphone market to have a long battery life,” Masahiko Ishino, a Tokyo-based analyst at Advanced Research Japan said by phone. “For Chinese makers who are looking to challenge Apple Inc. and Samsung, Sharp’s panel is a product that they want to have.”

Shenzhen, China-based ZTE will use Sharp’s latest high-end low-temperature polysilicon display in its new marquee model that will be released the second half of this year, according to spokeswoman Lan Liang.

To contact the reporters on this story: Grace Huang in Tokyo at xhuang66@bloomberg.net; Masatsugu Horie in Osaka at mhorie3@bloomberg.net

To contact the editors responsible for this story: Michael Tighe at mtighe4@bloomberg.net Aaron Clark

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.