By Andy Slawetsky – Sharp held their dealer meeting November 28 – December 1 in Phoenix AZ at the J.W. Marriott Dessert Ridge. Under the theme Pulse 17, Sharp brought about 939 people from 166 dealerships to the desert to see new products and hear about their strategies and their future.
As with most events of this nature, the first day was a travel day, with a welcome reception slated for that evening. Before the reception, we were treated to a closed press/analyst walk-through of the product fair where senior executives took us through the new hardware, solutions and partners before President and CEO Doug Albregts spoke to us with an update on Foxconn and Sharp’s first half of fiscal 2017.
This was the first big dealer meeting Sharp has held since becoming part of the Foxconn family in August 2016 and we’re just starting to see the results of the acquisition. Prior to this, Sharp was on the ropes, with serious questions as to whether they would be able to dig themselves out of the critical financial situation they found themselves in. While the business products group had done well, other (larger) areas of Sharp had struggled considerably over the last several years, pushing Sharp to the brink. Enter Foxconn, the largest electronics manufacturer in the world to save the day.
We started the walk-through with an overview of the 30+ new MFPs and printers that will roll out in 2018. The monochrome A3 line will be completely refreshed with the same approach Sharp used on their color line refresh earlier this year, meaning that the products will all share a common engine, common consumables and the same accessories. Dealers love this approach as it allows them to streamline the warehousing of parts and supplies.
The only negative issue I’ve seen with this strategy is that covering a full line with one engine can often translate into either an overly robust (expensive) device at the low end or a less competitive MFP at the upper end. We’ll see how Sharp handles that as the products roll out.
There were tons of partners on the floor and Sharp used a similar layout from their previous dealer show in 2015. I thought the room had a great flow with all partners having excellent visibility. No leasing companies were shoved to the back of the room in areas where dealers might not see them. The solutions were mixed in nicely with the hardware and it was easy to see and find all of them.
Sharp’s production area grew once again as they showcased their new monochrome gear, new partners, finishing products and workflow. There was a lot of interest in this section of the floor as their dealers continue to move upstream from traditional office printing into the world of production. While walking through this section, dealers were able to learn about proofing, EFI controllers and more.
The partner section was extensive and Sharp provided dealers with dozens of options that can help with nearly every aspect of their business.
Sharp had several leasing companies on hand such as GreatAmerica – recent winner of best leasing company from The Cannata Report and others to provide dealers with several options when it comes to financing.
Companies like BEI and ESP were there showcasing their service metrics (BEI) and power protection (ESP). Innovolt’s new president (and former Sharp senior executive) Ed McLaughlin was there as well.
For training, Sharp invited Coco Training to offer dealers a variety of sales and coaching programs for everyone at the dealership, from the brand new rep on their first day to experienced sales managers and more. Larry Coco has built a great program for the copier channel and it’s worth checking out.
Lexmark had a large space where they showed their A4 printers. Sharp dealers have had to rely on companies like Lexmark in the past to make up for the lack of their own A4 line – something that will change in 2018, although there will still be a need for partners like Lexmark.
ACDI and PaperCut were on hand to provide dealers with print management solutions. PrinterLogic was also there talking to dealers about serverless printing. Ringdale was there as well touting FollowMe.
Sharp brought DocuWare and others out to provide dealers with document management solutions as well as MWA, who was there talking to attendees about SAP Business One and the only ERP solution designed specifically for this industry.
There were several RFID vendors on hand as well, including Elatec, the German company with offices in the US who has made some waves in the US market over the last couple of years.
For non OEM products, which are critical to a dealer’s MPS program, Sharp has partnered with Clover, who was on hand talking to dealers about a variety of programs they offer.
Sharp brought partner Continuum to the dance to help dealers enter and grow into this lucrative space. Managed services is a key area many dealers are moving into and Continuum is one of the best at what they do.
Scanning partner Umango was on hand as well, showcasing their capture solutions for dealers. There was a great amount of interest in this connector that fills the gap most OEMs have with their own native products and even with some of their partners.
We saw Sharp’s new 8K video technology in a separate room. The images were stunning. You really have to see it to believe it. Once 5G connectivity starts to go mainstream in 2020 (give or take), this technology will really take off. Bandwidth is the only thing holding it back and Sharp is at the forefront of this technology.
Sharp was also showing their offerings in robotics security with a vehicle designed to roam parking lots and outdoor areas with 360 degree cameras, audio sensors, etc. At $250,000 and up, these are like something out the Transformers movies and offer dealers good margins with lots of initial and recurring revenue. While at a quarter of a million dollars, these vehicles seem expensive, the ROI on them is pretty quick and the six they have in beta have been quite successful.
The Skywell water coolers were also on hand as Sharp continues to pull products from other Foxconn subsidiaries. These water coolers are incredibly innovative. Touting a large, customizable display, they do not need to be connected to a water source. That means customers and dealers selling them no longer need to store and replace five-gallon jugs. The unit pulls water from the environment, much like a dehumidifier and purifies it.
Early testing suggests that this is actually some of the cleanest, most pure water available. And again, ongoing service contracts offer dealers another recurring revenue source. The coolers are inexpensive and customers love them. You give a good customer one as a thank you gift and I’m sure they’ll be back to order more. Will dealers get rich off of water coolers? Probably not. But, it all adds up and it’s just one of many products that will keep Sharp dealers close to their customers.
Sharp’s future office area was also pretty impressive as we’re seeing different technologies now tying together to provide a cohesive and simple way to work. Displays, white boards, MFPs and more will be centered around common authentication that will eventually come from your smart phone or even your face. They had a new device on hand that has yet to be named that sits in a conference room and authenticates meeting attendees when the walk in via a 360 degree camera. It pulls up their documents, uses speech recognition technology to take notes and provides these notes to everyone at the end of the meeting. It was very cool to see what it’s going to do. This “meeting bot” won’t be out for a while, possibly in 2018.
Once the walk-through was done, we spent about an hour with the executive team, including new VP John Sheehan who is now in charge of the dealer channel. John, EVP/COO Mike Marusic and Albregts spent some time talking about the show, what dealers would see, how Sharp is doing and What’s Happenin’ since the Foxconn acquisition.
Doug was pretty candid about their numbers, which were down in the first half. It was refreshing to hear an OEM actually admit that as it’s rare we hear anything negative from vendors at shows like this. But, they are what they are. Doug had even printed their earnings and gave them to the analysts, offering to answer any questions we might have. While the first half was rough for Sharp, the second is looking considerably better. We’ll see what happens when they’re available in about six months.
During the opening session, Doug took a moment to honor those who have serviced in the armed forces, discussing their US Initiative for hiring Veterans. At one point, he had all those who have served stand for recognition and even brought two industry legends up on stage to receive a gift of appreciation. Frank Cannata (Marines) and Mike Stramaglio (Navy) were presented with NFL military themed jerseys from the Giants and Bears. It was a great moment.
The real story at this event is the impact that the Foxconn acquisition has had on Sharp. They’ve gone from barely hanging in there financially to becoming the largest company in this industry – bigger in size (when you include their parent) than HP, Xerox and everyone else. Foxconn has deep pockets and they’re clearly very encouraged by the opportunity Sharp provides to them as a B2B organization with a recognized global brand. The following day, we would hear from Ted Kawamura, North American Chairman, that Sharp has been re-added to the Tokyo Stock exchange at Tier One, completing their recovery in just over a year.
We’re starting to see new products that are co-developed by Sharp and Foxconn, such as the forthcoming A4 printer line, which was developed and built in a year. Foxconn technology has now made its way into Sharp’s displays. Earlier this year, Foxconn announced that they will be opening a $10B plant in Wisconsin to build displays like these, a project that will add 13,000 jobs to the area as well as thousands more in support that the facility will require once it’s up and running. Foxconn is a big believer in building products closer to the markets where they’ll be sold and I got the feeling we may one day see office equipment plants built in the US as well. That’s just a guess.
Another key advantage Sharp receives because their parent company is Foxconn is in buying power. In the past, Sharp would order parts from suppliers just like everyone else. Now, they order as Foxconn, which is providing considerable discounts on the components that go into their hardware. Their suppliers are a lot more aggressive with their pricing now as they’re hoping to get in the door at Foxconn. Sharp also gets to buy out of a catalog of components at Foxconn pricing rather than negotiating their own on an as-needed basis. This should translate into considerably better margins and probably more aggressive prices for their dealers.
Sharp is one of the companies that will lead this industry into the future, especially when it comes to things like Artificial Intelligence (AI) and the Internet of Things (IoT). The way Doug and Mike spoke about it, when your daddy is Foxconn, you get a seat at the big boy table. This will be instrumental in Sharp’s ability to be included in conversations they never have been a part of when they were “just Sharp.”
We saw a great example of this while we were at the conference as Amazon announced a new business initiative for their Echo platform during a press conference held elsewhere. During this major Amazon announcement, Sharp was the only imaging industry OEM to be listed as a partner on their slides. This is exactly what Mike and Doug were talking about. In the past, Sharp would definitely not have been one of the major Amazon partners during a launch of this magnitude. But, as a part of Foxconn, they were included. I’m sure others will sign on as part of the Amazon strategy eventually. However, Sharp was first and this may become a trend.
This is because major global companies like Amazon, Microsoft, Apple and others are so big, the imaging industry just isn’t big enough for companies at that level to include in their early planning stages. However, Foxconn is a critical partner to nearly all of them. And that means that Sharp gets a seat at the table. It gives Sharp a voice at the highest levels and I don’t know if any other brand can say that.
The meeting itself was much like most others in that we started the first full day with a general session where we saw the product roadmap and heard more about the impact Foxconn has had on Sharp in just their first year together. After the early sessions, dealers hit the product fair en masse until lunch, followed by breakout sessions.
That evening, we were whisked off to a ranch for some solid networking, great food and cocktails. It was a nice evening and an awesome excuse for this western NY boy to bust out his cowboy hat and boots.
The next day started with another general session and included a key note by Professor Tassu Shervani of the Cox School of Business at SMU. Professor Shervani’s session was titled “How Technology is Reshaping the World: Opportunities and Challenges.” This guy was fascinating and I could only think if I had a professor like this at U Maryland when I was there, I probably wouldn’t have wound up selling copiers! It was one of the best speakers I’ve seen over the years and his hour flew by. Just awesome.
After the morning general sessions, dealers were back in the product fair until lunch and then it was off to our exclusive analyst roundtable with Doug, Mike and John. I greatly appreciate being able to sit in a smaller room with these guys. The access and ability to ask questions point blank was wonderful.
While we were in our meeting, there were more break out sessions being held until dinner, which started with the Hyakuman Kai reception that I snuck into, prior to the larger open reception and then the awards dinner and entertainment.
The entertainment that night was from songwriter/performer Dan Wilson. Dan has written hits such as Closing Time as well as songs like Someone Like You from Adele and other major hits that you definitely know. It was amazing to hear him sing these songs and tell his stories. And unlike most performers at shows like this, Dan and his band hung out with the dealers later at the bar. They were still there when I left at about 1 AM. Very cool!
One of my favorite parts of the event was meeting all the Sharp dealers from Australia that came over for a tour and to attend the conference. Besides sitting in at Pulse 17, these guys were treated to the hospitality of the Les Olson Company in Utah, attending a Utes game and learning about the finer points of a good old American Tailgate. I have a pretty nice following over there and these guys were an absolute blast. I look forward to heading over next year to present to them and write a What’s Happenin’ at their next dealer event!
After all the crap Sharp has been through over the last several years, they’ve finally gotten (it’s a word…look it up) their legs under them. Their numbers in the first half are a concern but the bigger picture tells the real story. Sharp is not the MFP company we once knew. Daddy has deep pockets and he wants his kid to make it, providing Sharp with financial support and access to much bigger things.
The Foxconn portfolio is enough to make one’s head spin and while Sharp has tried to diligently go through it, the Foxconn people keep pushing new products at them. I get the feeling it’s like drinking from a fire house and indeed, Sharp mentioned they’ve had to slow Foxconn down a bit in this respect. There’s just too much to look at. Foxconn has a portfolio unlike anyone in the imaging industry and there is a great deal in that catalog that Sharp is considering bringing to their dealers – stuff that no one else has.
What a difference a couple of years makes. Sharp is now poised to be one of the companies that will help define the office we will eventually work in. They are spending money again, not just at shows like this but in other highly visible areas, such as their partnering with major sports arenas like Giant Stadium and others, showcased earlier this year during a series of road shows.
Speaking of money, Doug talked about the position they’re now in with respect to acquisitions. He said several times that Sharp has a war chest and that nobody is too big to be considered, Not just dealers, but literally anyone is on the table, including competitive OEMs. If Sharp can put together a business plan that justifies it, Foxconn will go after it on their behalf. And Foxconn generally gets what they want. It should be interesting to see where they spend their money in 2018 and who they acquire. Acquisitions are imminent.
This was truly a great show. Dealers loved what they saw and there’s a confidence around their vendor that you don’t see with a lot of other brands. I don’t think I ever heard so many positive comments at a Sharp show. These guys were jazzed to say the least. Super pumped up with the products and the messaging. Again, this was not the case two years ago. Congratulations to Sharp for the progress you’ve made and thank you for including us in this year’s show. It was one of your best yet.