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40 Seiko Epson Annual Report 2005
Management’s Discussion and Analysis of Financial Condition and
Results of Operations
Overview
Net Sales
Consolidated net sales increased ¥66,507 million, or 4.7%, to ¥1,479,750 million. This growth was
mainly attributable to an increase of ¥41,458 million, or 9.4%, in sales in the electronic devices
segment to ¥482,611 million. Another factor was an increase of ¥25,649 million, or 2.8%, in sales in
the information-related equipment segment to ¥946,029 million.
Sales for each business segment were as follows.
In the information-related equipment segment, sales were up ¥25,649 million, or 2.8%, to ¥946,029
million. Results by product category were as follows.
Despite a decline in single-function printer volumes, reflecting growth in the multifunction printer
market, sales of inkjet printers, including related supplies (the same applies to various printers
mentioned below), rose on the back of two key factors. One was growth in multifunction printer
volumes, while another was higher sales of supplies tracking an increase in the number of inkjet
printers in use. Sales of laser printers also rose, boosted by higher volumes of supplies as the
number of laser printers in use climbed. Sales of scanners and other products fell as expansion of
the multifunction printer market hindered sales of single-function scanners.
In the electronic devices segment, sales increased ¥41,458 million, or 9.4%, to ¥482,611 million.
Results by product category were as follows.
The start of operations at SANYO EPSON IMAGING DEVICES CORPORATION had the effect of
adding two new products to Epson’s LCD lineup: amorphous silicon TFT LCDs, and low-temperature
polysilicon TFT LCDs. Growth in sales volumes drove higher sales of graphics-rendering system
LSIs for mobile phones and quartz devices found in mobile phones and digital still cameras. In
contrast, lower monochrome STN-LCD output and fierce competition in color STN-LCDs caused
volumes and monetary sales to decline for both products. In LCD drivers and MD-TFD LCDs, falling
prices from intensifying competition pushed sales lower, particularly for color LCD drivers and MD-
TFD LCDs for mobile phones.
In the precision products segment, sales increased ¥41 million year on year, or 0.0%, to
¥81,143 million. Results by product category were as follows.
Sales of optical devices rose on higher volumes, tracking growth in the LCD projector market.
Sales of corrective lenses were also higher, driven primarily by a climb in sales volumes in the
North American market. Watch sales, meanwhile, declined due to lower volumes, reflecting a
lackluster market.
In the other segment, sales increased ¥5,053 million, or 17.2%, to ¥34,510 million.