Kenwood 2000 Annual Report Download - page 10

Home Audio
Audio
Equipment
KENWOOD Corporation Annual Report 2000
8
Audio equipment is one of the major business
categories for Kenwood. In recent years, the market
for home audio equipment has been marked by a
drastic fall in prices, and with the added impact of a
stronger yen the company has been struggling in this
category, especially overseas, despite more units
being sold each year. Domestically, where MD is
gaining more popularity, Kenwood has added color
variations to the major products with built-in MD
player and has turned them into the most wanted
items on the market.
Now celebrating 20 years of activity, domestic market
car audio sales remain only on a par with the previous
year as automobile sales continued to slump. On the
other hand, newly introduced DVD car navigation
systems performed very well and OEM sales have
expanded. Overseas sales also thrived, aided mainly
by the continuous growth of the automobile market,
especially in the US.
Kenwood continued to hold
second place in that country's
after-market sales, thanks
largely to the popularity of the
brand. However, despite
such performance, the sales
amount in yen decreased due
to the appreciation of the yen.
Overview
Sales of the home audio for the year ended March 2000
decreased 12.9% from the previous year to ¥95.2 billion.
Despite the expansion of MD products, such as MD
component systems and MD-radio-cassette players, in the
domestic market, Kenwood's major items - stereo
component systems - have been affected by lower market
prices. As a result, domestic sales stood at ¥43.7 billion,
a decrease of 1.2% from the previous year. However, our
newly introduced line of products featuring interior-
friendly design was well received in the market as there
was nothing equivalent. One of the new design concepts
was the introduction of color variations. Five color
variations in the Rampage line of MD-radio-cassette
players and four variations in the Avino micro-component
systems increased sales of those lines, largely by
attracting female users. Meanwhile, the Avino VH-7MD
was awarded the Good Design Prize by MITI for its
superior look and a unique concept that enables it to be
operated on its side as well as upright.
On the other hand, overseas sales shrank to ¥51.5
billion, 20.8% less than the previous year, due to falling
prices on the global market and the stronger yen against
the dollar and the euro.
Strategy and Prospects
In the home audio business, Kenwood will try to
improve sales and profits by introducing new models
with added features in the Rampage and Avino lines,
both exhibiting impressive performance in the domestic
market. We also have a plan to develop devices to
handle music distribution over the internet by fully
utilizing our competence in diverse technologies. For
example, at an exhibition held in November 1999 (Audio
EXPO '99) the company drew acclaim by demonstrating
a prototype piece of audio equipment that is capable of
downloading music from the internet and playing it
back. Such products will be introduced in the market at
the appropriate times, with an eye to progress in the
infrastructure for music distribution services on the
internet in Japan. At the same time, a new
approach in marketing that utilizes the Web is
also under study, especially for products
suitable for online sales and other
products tailored to
Percent of Net Sales
77.1％
Review of Operations