Sharp may sell Gala­pa­gos in Europe, China to chal­lenge Ap­ple IPad

The Pak Banker - - Company & Boss News -

OSAKA: Sharp Corp., which started sell­ing its Gala­pa­gos e-reader in Ja­pan this month and will mar­ket it in the U.S. in 2011, is tar­get­ing Europe and China next to chal­lenge Ap­ple Inc.'s iPad and Ama­zon.com Inc.'s Kin­dle.

"Af­ter the U.S., we're look­ing at other re­gions where elec­tronic-book read­ing is in­creas­ing," Masami Oh­batake, an ex­ec­u­tive in charge of the com­pany's com­mu­ni­ca­tions busi­ness, said yes­ter­day in an in­ter­view. Sharp teamed up with Ver­i­zon Com­mu­ni­ca­tions Inc. to sell the de­vice in the U.S, he said.

Sony Corp. and Sam­sung Elec­tron­ics Co. also aim to in­crease their share of the mar­ket for e-read­ers, de­vices that al­low users to read e-books, mag­a­zines and news­pa­pers, and can also play video and au­dio files. World­wide ship­ments of elec­tronic-read­ing de­vices may rise more than five-fold from last year to 26.5 mil­lion units by 2014, ac­cord­ing to re­searcher ISup­pli Corp. The fig­ure ex­cludes sales of tablet PCs such as the iPad.

"I don't think the Gala­pa­gos will be suc­cess­ful," said Atul Goyal, a se­nior an­a­lyst at CLSA Asia-Pa­cific Mar­kets in Singapore, who has a "sell" rat­ing on Sharp. "I won­der how this com­pany will make money in this prod­uct cat­e­gory when they are one of the many crowded par­tic­i­pants, with­out any com­pet­i­tive ad­van­tage, with an ex­pen­sive price tag, and with no brand power." The Gala­pa­gos 10.8inch model sells in Ja­pan for 54,800 yen ($655), com­pared with the 16-gi­ga­byte iPad at 48,800 yen.

The name of Sharp's ereader de­rives from "Gala­pa­gos syn­drome," a term that refers to the idea that Ja­panese technology has evolved in an iso­lated set­ting that has lit­tle in com­mon with the out­side world, Oh­batake said. "Peo­ple might think the name is strange, but as a Ja­panese com­pany we're proud of our tech­no­log­i­cal de­vel­op­ments," he said. "We wanted to show that Ja­panese technology is ac­tu­ally be­ing used all over the world."

Sharp, the maker of Aquos tele­vi­sions, in 1988 de­vel­oped the world's first color thin film tran­sis­tor liq­uid-crys­tal dis­play, and in 2000 mar­keted the first cam­era-equipped mo­bile phone, ac­cord­ing to its web­site. The Osaka-based com­pany is also Ja­pan's biggest mo­bile phone maker.

Gala­pa­gos sales in Ja­pan are "off to a good start," Oh­batake said, de­clin­ing to give spe­cific fig­ures. The palm-sized 5.5 inch model is out­selling the 10.8 inch model by about 2-to-1, prob­a­bly be­cause it's eas­ier to use on trains, he said. The com­pany tar­gets sales of 1 mil­lion units by next year, and Oh­batake said the de­vice's soft­ware, called XMDF, may help Sharp com­pete in the elec­tronic book mar­ket be­cause it al­lows pub­lish­ers to lower the cost of pro­duc­ing elec­tronic ti­tles.

Sharp is in talks with con­tent providers in the U.S., Oh­batake said.

Oh­batake said the Gala­pa­gos, tai­lored to dis­play ver­ti­cally run­ning Ja­panese script, can be eas­ily adapted for over­seas mar­kets. Sharp is con­sid­er­ing sell­ing the de­vice, mar­keted as a "me­dia tablet" that com­bines e-read­ing func­tions and au­dio-vis­ual play­back, in Europe and China as early as next year, he said, with­out spec­i­fy­ing when the de­ci­sion will be made.

Sharp's shares, down 27 per­cent this year, rose 1.7 per­cent to 853 yen as of the 3 p.m. close on the Tokyo Stock Ex­change, com­pared with a 1.5 per­cent gain in the bench­mark Nikkei 225 Stock Av­er­age. Ap­ple's shares have risen 53 per­cent this year, and Seat­tle­based Ama­zon's stock is up 36 per­cent.

Sony this month in­tro­duced its Reader de­vice, and Sam­sung Elec­tron­ics is tar­get­ing sales of 1 mil­lion units for its Galaxy Tab by year-end af­ter un­veil­ing the prod­uct in Septem­ber. Ap­ple con­trolled 95 per­cent of the mar­ket for tablet com­put­ers in the three months ended Septem­ber, ac­cord­ing to re­searcher Strat­egy An­a­lyt­ics. The com­pany sold about 7.46 mil­lion iPads be­tween April and Septem­ber, ac­cord­ing to Bloomberg data. -Bloomberg

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