Canon 2004 Annual Report Download - page 47

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RESEARCH AND DEVELOPMENT, PATENTS AND
LICENSES
Canon is now in Phase II of its Excellent Global Corporation
Plan, which started in 2001 and will end in 2005. The
management plan aims to guide Canon to the No.1 position
worldwide in all core business areas, to build on its R&D
capabilities and to continually create new businesses and to
further strengthen its financial position.
With respect to its R&D goals, Canon formulated as part of
its management plan the “Canon Over IP” concept, through
which Canon intends to connect its digital products to the
Internet and lay the foundations for Internet-businesses for the
future. Canon envisions Canon products and systems
interconnected over networks, as well as a variety of Web
services that expand its business domains while creating new
value for customers.
Canon has R&D centers worldwide that closely collaborate
in their R&D activities. Some regional R&D centers conduct
basic research into technology, and others apply their
expertise to develop new products and businesses.
The Company’s R&D activities are conducted in the
following four organizations:
• Core Technology Development Headquarters (where
component engineering and base technology R&D, such
as optics technology, nanotechnology and production
engineering, is conducted)
• Leading-Edge Technology Development Headquarters
(where most advanced technology R&D aiming to create
new technological capabilities, is conducted)
• Platform Technology Development Headquarters (where
platform technology R&D, such as system Large Scale
Integration (LSI) chips, network technology and visual
information technology, is conducted)
• Device Technology Development Headquarters (where
key device R&D, such as for semiconductor devices, is
conducted)
Canon had R&D expenditures of ¥275,300 million
(U.S.$2,647 million) in fiscal 2004, ¥259,140 million in fiscal
2003 and ¥233,669 million in fiscal 2002. The ratio of R&D
expenditure to total net sales for fiscal 2004, 2003 and 2002
was 7.9%, 8.1% and 7.9%, respectively.
Canon seeks to produce new products that are protected
by patents and to set market product standards in order to
enhance its market position. The United States Patent and
Trademark Office (USPTO) announced that Canon obtained
the third-greatest number of private sector patents in 2004.
This achievement marks Canon’s thirteenth consecutive year
as one of the top three patent-receiving private-sector
organizations.
Canon aims to realize production procedures that
dramatically reduce the need for prototypes, in the design
process, through the effective utilization of 3D-CAD systems,
in order to accelerate product development and curtail costs.
RECENT DEVELOPMENTS
On October 15, 2004, the Company entered into an
agreement with Canon Sales Co., Inc. and Canotec Co., Inc.
(“Canotec”), joint equity shareholders of Niigata Canotec Co.,
Inc. (“Niigata Canotec”), to acquire all outstanding shares of
Niigata Canotec. Therefore, on January 1, 2005, Niigata
Canotec became a wholly owned subsidiary of the Company
and changed its name to Canon Imaging System
Technologies’ Inc. By making Canon Imaging System
Technologies Inc. a wholly owned subsidiary of the Company,
Canon aims to raise the level of its technical capacity and
improve development efficiency by enabling closer
coordination each other.
On January 1, 2005, Canotec and FastNet, Inc. merged,
and changed its name to Canon Network Communications,
Inc. The purpose of the merger was to increase management
efficiency by consolidating the Canon Group’s network and
Internet service operations. Canon Network Communications,
Inc. aims to strengthen Information Technology Management
Services, dealing with all stages from the establishment of
comprehensive network systems to their operation and
management.
300,000
0
R&D expenditure
(Millions of yen)
233,669
259,140
275,300
218,616
194,552
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