JOINT STATEMENT BY SHARP ELECTRONICS CORPORATION AND EDWARD MCLAUGHLIN

Art Post (Guest)

JOINT STATEMENT BY SHARP ELECTRONICS CORPORATION AND EDWARD MCLAUGHLIN

Mahwah, NJ, June 1, 2011 – Sharp Electronics Corporation (SEC) Chairman and CEO Kozo Takahashi and Edward McLaughlin today said that they have reached an agreement concerning Mr. McLaughlin’s decision to step down as President of Sharp Imaging and Information Company of America (SIICA) and as a Director of SEC. Mr. McLaughlin will assist in the search for his successor, which is now underway.

Once SIICA’s new President has been appointed, Mr. McLaughlin will remain with SEC where he will serve as a senior advisor to SEC and to SIICA. This advisory role will include, among other projects, working to ensure a seamless transition to SIICA’s new leadership.

Mr. McLaughlin also expects to begin to pursue new business opportunities as an independent consultant to companies in the field of office automation, focusing on designing, developing and managing projects that would employ his deep expertise and more than 35 years of industry experience. He and Sharp have agreed that, during this period, he will not enter into consulting or other engagements that would conflict with Sharp’s business objectives.

Commenting on Mr. McLaughlin’s contributions during his more than nine years with the Company, SEC Chairman and CEO Kozo Takahashi noted: “Ed has contributed greatly to Sharp’s leadership position in the document industry. As a member of SEC’s Board and Chair of the Board’s Audit Committee, his contributions have reached well beyond the document division. We sincerely appreciate his many contributions.”

Mr. McLaughlin’s accomplishments during his nine years as President of SIICA include a leadership role in the revitalization of the company’s product lineup. Each new product that SIICA has introduced during his tenure has been recognized by Buyers Laboratory Inc. as “Highly Recommended” or a “Pick of the Year” in its category. He has also been recognized as Executive of the Year by Marketing Research Associates, an industry research firm.

As President of SIICA, Mr. McLaughlin has had overall responsibility for U.S. sales and marketing of Sharp’s broad-based line of multifunctional products and software solutions as well as its line of professional display products, point-of-sale (POS) systems and information devices. SIICA will continue to develop and expand its successful business in this dynamic area in which it is a recognized leader.

6/8/113:58 PM

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TallacSenior P4P'er

Odd - not a retirement. More like "he is free to leave (even though it doesn't sound like he has another job lined up), and we wish him well."

Given that the Japanese are consumed with "face", is this the precursor to big changes in strategy?

Are they letting Ed leave on his terms, so he would not have to preside over changes that would cause him, in their eye's, to loose face?

Their $$$ in the US market are topped out, unless they make a much bigger commitment on direct branches, or they move into consulting and non hardware related services.

Are they pulling a Panasonic?

6/9/117:22 PM

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Art Post (Guest)

Tallac makes a great point "Are they pulling a Panasonic". I'm not that familiar with Sharp and the upper tier of management, however Ed has been one of the premier guys for quite a while.

Anyone else have anything to offer up on this sudden change at Sharp, especially since it was only a month after the dealer meeting??

6/9/119:17 PM

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GIntelMaven

Sharp is still in.

They are under-distributed and I'm sure Japan is dissatisfied with this so I would not be surprised to see some changes, but Sharp is still invested in printing and these changes will probably be intended to drive growth, not just cut costs.

By the time Panasonic bailed they had not launched a new A3 in three years, sold off their direct division, turned their dealers into resellers. Far more writing on the wall

6/10/1112:07 AM

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TallacSenior P4P'er

I'm not completely convinced.

Let's be honest, the growth for a manufacturer is not going to come from selling 45 ppm machines for $4,000 that the previous generation sold for $12,000.

The growth comes in MPS, more specifically Sharp selling the services (it doesn't benefit them if a dealer put together a deal w/ Innovera consumables and LMS or Barrister on the break/fix).

For Sharp to experience topline growth, they need to invest far more than they have been willing to in direct branches.

If they are not making that investment, the end result is eventually getting out.

6/10/1112:43 PM

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GIntelMaven

Well who knows what will happen in five years.

There is no evidence to suggest that the industry will not keep consolidating.

My point was, I do not believe Sharp is in the process of killing this part of its business. I feel like they are still trying to grow it. Plus if there was ever a time to freeze direct branch expansion it was 2008-2011.

6/10/112:19 PM

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montecoreElite P4P'er

These are all very interesting comments. Not sure if anyone has seen the videos and new interface on the color systems. Watch those videos on youtube and see yes that is a cool interface but is it really practical? From talking with others this is a very confusing non-friendly user interface compared to the previous MX color series. I think this is going to hurt this color series in the long run. The real challenge comes when there are MX units in an account then add this Aries series. Or mix the color with the exisitng MX black. Customers are at a loss and are not happy. They have a full learning curve to master. They should have just left that interface alone and added new features to match the competitors like dual line fax, LCT as a tray not a side box, more robust saddle stitch finisher, wireless card, multi-fold finishers, handle envelopes better, fix the legal size booklet issue this is big issue, make sure you can print large envelopes and add a fiery rip. I just think like others that I have spoke with all feel Sharp has moved in the wrong direction.

6/10/118:38 PM

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Art Post (Guest)

I dunno, I can see much room for Sharp anymore. Growth areas are Print Production, very low end and MPS. Right now I don't see them as a player in any of these markets. They don't have wide format, duplicators (not that these have been big sellers lately), scanners.

I was just on the sharp web site and what do they have three models of laser printers, maybe four tops!

The claim to fame is A4 right now and the slick GUI. The industry is changing once again, thus we could see additional changes.

I've been following Sharp for years, I just don't see the commitment to the Imaging business like they had many years ago.

6/11/1112:14 AM

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montecoreElite P4P'er

Very good points Art. The only print production (as some would call it) would be 85, 95, 110ppm. But these are more large departmental units. Mostly it is the 85ppm that is being pushed. There are only a few major players when you get higher than that. The very low end has always been a issue for them. The only item would be the AR-208 unit but that little Ricoh desktop will blow that away. Then there is the issue that some of these low end units can only be purchased from a distributor that in itself is a challenge when you try to compete in a large bid. I have seen some insane volumes that those units can do. The A4 seems to be the hot commodity now and has been their focus as the market was swinging. The printers are the A4 units without the RADF's the bad part is they are no cheap...should not have to pay a 3-4K for a laser printer. HP will kill that! This has never been a focus for them. MPS is a rare breed from them. They say they can do it but having the training to get that done it a different question. Then that leaves wideformat which they could never compete. I think they moved in the wrong direction with that non-friendly user interface with cool features that 95% of end users would never use. Even the retractable keyboard is rarely used but hey that is a cool feature. I think they will get gobbled up by one of the major players in the market overtime.

6/12/1110:49 AM

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GIntelMaven

I agree with almost all of everyone's statements.

The truth is its just going to get harder for each of the second tier guys to grow and succeed and considering that Sharp, Kyocera, and Toshiba all have plenty of options outside of printing it would not be shocking to hear if some of them left or sold-out in the next five years.

However, the feeling I get is that each of them still has some fight left and although they all face some headwinds none are actively working on their exit strategy. That said, right now it does seem like Kyocera (A4s, TCO) and Toshiba (services, direct presence, A4 partnerships) are better suited to emerge successfully out of the three.

With all respect to Mr. McLaughlin. He was a box-pusher and that is part of the reason that Sharp has such a hardware-led strategy. We will see, but the best thing that could happen to Sharp would be for his successor (they have some smart people there) to come in with a services led approach and strategy that covers all key product areas and business areas. I think Sharp realizes its need to expand direct sales coverage and additional services too.

Either way, it will be exciting to see how this all shakes out.

6/12/113:47 PM

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Sharp1Junior P4P'er

Psssst!Sharp's #1.

6/12/1111:39 PM

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Art Post (Guest)

quote:
Originally posted by Sharp1:
Psssst!Sharp's #1.

What are they number one for????

6/12/1111:42 PM

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braxtoqJunior P4P'er

quote:
Originally posted by GIntel:
I agree with almost all of everyone's statements.

The truth is its just going to get harder for each of the second tier guys to grow and succeed and considering that Sharp, Kyocera, and Toshiba all have plenty of options outside of printing it would not be shocking to hear if some of them left or sold-out in the next five years.

However, the feeling I get is that each of them still has some fight left and although they all face some headwinds none are actively working on their exit strategy. That said, right now it does seem like Kyocera (A4s, TCO) and Toshiba (services, direct presence, A4 partnerships) are better suited to emerge successfully out of the three.

With all respect to Mr. McLaughlin. He was a box-pusher and that is part of the reason that Sharp has such a hardware-led strategy. We will see, but the best thing that could happen to Sharp would be for his successor (they have some smart people there) to come in with a services led approach and strategy that covers all key product areas and business areas. I think Sharp realizes its need to expand direct sales coverage and additional services too.

Either way, it will be exciting to see how this all shakes out.

It will be a challenging time for Sharp, I agree, Ed was a very good leader and actually had a good grasp on technonolgy, he always knew the strengths and capabilities of the products and solutions. Regarding the new User Interface, dont be deluded by comments that it is going to a difficult learning curve, the display may look complex at first glance, but it is the most flexible system on the market. You can make it real simple for the end user and there are features that will blow you away. Sharp is a sleeping giant, wait and see!

6/16/1110:44 AM

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montecoreElite P4P'er

Braxtoq....those features may blow the end user away but when they are rarely used what good are they. In a demo that can be impressive just like the retractable keyboard. However 9 times our of 10 those features although are very cool will never be used. These units are a tough sell compared to the previous MX color series. There are many that are intimidated by this interface no matter how easy it for them to use. As you know every manufacturer has their bells & whistles that are promoted....so to make a bold statement that these are the most flexible system would be a stretch. They are definitely not a powerhouse like the big boys as many on this board can attest. They hold their ground but there are many areas they are lacking and despite all the end user complaints the R&D rarely address these ideas. There are areas that they just will not improve on when all the other boys already have these solved. They are not interested in getting every deal because they could not match up. Even though there have been several complaints in certain areas they choose not to fix these areas and don't really care if they lose a deal because their competition can meet the end users needs. I am not saying that all manufacturers are perfect but from talking with others the big boys listen and make those improvements. Many predict they will be gobbled up by the big boys in time. It is very rare that you see Sharp in large corporate accounts compared to the others. Especially in graphic heavy areas because Sharp cut off the EFI relationship and they only have business color not graphics color. You are correct only time will tell but it will be an uphill battle.

6/16/1111:12 PM

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braxtoqJunior P4P'er

I understand where you're coming from, I believe, you may be talking about the ability to actually delete up to 4 areas per document through the display. What I am speaking about regarding flexibility is to have 1 button on the home screen that does multiple steps like 3 hole punch, saddle stitch and pull covers with a custom watermark, with a picure of the user that requires these functions, or email destinations with the name of the recipieint and their custom file type as a 1 touch button. It really is simple to setup whatever your customer needs and make a really simple home screen with just those functions! Sharp, I concede, does not have a graphic color engine right now, but it is coming down the road. I am wondering what areas Sharp is lacking in from your point of view, maybe you missed them, maybe I did?

6/20/1110:09 PM

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Art Post (Guest)

quote:
What I am speaking about regarding flexibility is to have 1 button on the home screen that does multiple steps like 3 hole punch, saddle stitch and pull covers with a custom watermark,

Is this really all the fuss about the Sharp GUI??? We've been able to do this for years with the Ricoh GUI (well not on the home screen, but in the program modes).

6/20/1110:59 PM

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TallacSenior P4P'er

Braxtoq,

I think that the larger point is that the GUI is irrelevant. We (who have been in the industry for a while) can remember selling 75 and 85 ppm machines for $40 - $50k. Now they are talking about 75 and 85 ppm A4 machines for under $10k.

The question is how you make up the revenue, and that has to be on services - and Sharp is not well positioned due to their thin direct side.

Also, since they are print copy oriented (I don't think that they really make money on scanning), they are really sensative to drops in paper consumption.

I just re-did my 401K, and I had a stack of paperwork that needed to be signed, and initialed, and I was able to do it all online.

I think that one of the results of this mortgage mess will be a universal conforming doc, and the ability to sign digitally.

Think about what that would do to the companies in high housing areas.

6/21/1111:45 AM

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braxtoqJunior P4P'er

quote:
Originally posted by Art Post:
quote:
What I am speaking about regarding flexibility is to have 1 button on the home screen that does multiple steps like 3 hole punch, saddle stitch and pull covers with a custom watermark,

Is this really all the fuss about the Sharp GUI??? We've been able to do this for years with the Ricoh GUI (well not on the home screen, but in the program modes).

Sharp MFP's have been able to do that for years as well, 3 customized buttons on the main screen, the new UI will allow you to put up to 18 customized buttons on each page, with up to 15 pages available on the Home Screen, this can be done from the panel. You can also add buttons for any of the OSA connectors you may need, for example a connection to your Document Managment System, Fax Server or Cost Accounting application. There are 24 loaded languages that can be easily tied to the user's account name or pin . I can keep going!

6/22/113:40 PM

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Art Post (Guest)

braxtoq:

Please I'd love tolearn more about the Sharps!

6/28/1110:23 PM

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