The withdrawal of the lawsuit in New York is just the beginning. Foxconn is going all out to attack Hisense and take back Sharp. What are its chances?

The peaceful television industry was disrupted by a dispute in America in June this year. Foxconn and Hisense, two Chinese companies, started a battle for the Sharp brand on the other side of the ocean.

In 2015, Japan's Sharp reached an agreement with China's Hisense to transfer its brand usage rights and channels in the Americas (except Brazil) to Hisense for a period of five years starting from 2016.

However, only one year later, on June 9, Sharp sued Hisense in courts in New York and California, USA, demanding the recovery of the right to use the brand and claiming $100 million in compensation.

Although Sharp withdrew the lawsuit in New York on June 16, a week after the incident, according to people familiar with the matter, Sharp did so at the request of its legal team to concentrate its efforts on the lawsuit against Hisense in California. Currently, the official website of the California Court of the United States shows that the case between Sharp and Hisense is still in progress.

A year later, Sharp found a better backer

The dispute over the Sharp brand is actually about two backers, one is Hisense and the other is Foxconn.

In 2015, Sharp was in financial difficulty and suffered heavy losses, and was desperately looking for a way out of the predicament. Finally, Sharp sold its factory shares and assets in Mexico, plus the 5-year right to use the Sharp brand in the Americas, to Hisense at an extremely low price of US$23.7 million.

Soon after, Sharp's situation took a turn for the better. Foxconn acquired Sharp for 388.8 billion yen in early 2016, planning to use Foxconn's own supply chain advantages in conjunction with Sharp's technological advantages, not only to turn Sharp's losses into profits, but also to rebuild Sharp's high-end brand halo on a global scale.

Since then, Foxconn has begun discussing the return of the Sharp brand with Hisense, but they have never reached a consensus, which eventually led to the lawsuit between Sharp and Hisense in the United States.

Between Foxconn and Hisense, which one is the most suitable godfather for Sharp?

In recent years, going overseas to seek new market opportunities has become the main theme for Chinese TV manufacturers. For domestic TV manufacturers that are rich but lack global business experience, the "Father of LCD" who has experienced a sharp drop in value but has a huge user base and popularity around the world, making Hisense's takeover of Sharp the best choice at the time.

According to industry estimates, with Hisense's marketing capabilities, annual production capacity of 3 million units in Mexico, and Sharp's inherent high-end brand appeal, it is expected to bring Hisense Group more than US$2 billion in profits in the Americas, which means Hisense has no reason to spit out the fat in its mouth to Foxconn.

However, the basis for Hon Hai's argument against the Sharp brand is that while Hisense has gained profits in America, it has also caused damage to the Sharp brand.

As we all know, Sharp has long formed an iron rule. Unlike other brands that use mixed panels, Sharp will use its own LCD screens for all Sharp brand TVs. This is the pride of the "Father of LCD", the fulcrum of Sharp's high-end brand image, and the expectation of Sharp users for Sharp TVs.

However, under Hisense, Sharp, which is sold in the Americas, broke this principle and began to use domestic LCD panels. In this way, regardless of whether the product sales profit has increased, it has violated the original intention of the Sharp brand and also aroused the disgust of many users.

Of course, Hisense does not agree with such accusations, believing that its practices have no impact on the reputation of the Sharp brand, and have even made Sharp TV's performance in the American market continue to rise. However, what Foxconn is more worried about may be that the sale of low-end Sharp TVs in the United States will leave hidden dangers for the brand image in the future. It is worried that after the expiration of the five-year contract, Foxconn will be left with a broken market, making it difficult to complete the task of the Sharp brand returning to the high-end market in the world.

Hon Hai's actual action to address this concern was to withdraw the lawsuit in New York and focus on the lawsuit against Hisense in California. Earlier, there was news that Sharp withdrew the lawsuit against Hisense in New York, which led to media speculation that Hon Hai had reached a private agreement with Hisense. But the fact is that according to the advice of Sharp's American legal team, due to the differences between state laws, focusing on the lawsuit in California can achieve a higher chance of winning and a greater chance of returning the Sharp brand to Hon Hai.

From a legal perspective, the Sharp brand is still in the hands of Hisense. But from the perspective of "Sharp TVs use Sharp screens", in the future, Sharp will fully return to Hon Hai and return to the high-end market where it should be, which should be a better result for the market and users.

Regarding the Sharp brand issue and the possible re-filing of a lawsuit against Hisense in California, (official account:) also contacted the domestic head of the Sharp brand as soon as the news came out, but Sharp said that there was no more new information worth sharing and believed that the standard for measuring a brand still depends on performance.

Closely related to the performance of TV brands is naturally the quality of the products and the quality of the screens used. From this point of view, Foxconn's withdrawal of the lawsuit against Hisense in New York is just the beginning of a new round of battle for the Sharp brand.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.