Sharp and Hon Hai agreed to scrap their plans to develop and sell smartphones in china jointly. This decision was arrived at after assessing the available opportunities and risks in Chinese market; they realized that there is intensified competition from local manufacturers over the past years. This, however, was not to affect other alliances such as Japanese LCD factory. Sharp smartphones faced stiff competition from strong foreign brands such as Apple and Samsung, and this facilitated the scrap since it has a small presence in the market. The scrapping of the smartphone in China market is to help Hon Hai and Sharp to avoid risks and losses in the global market.