NEC 2007 Annual Report Download - page 24

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Fiscal 2007 Operating Results
In fiscal 2007, the year ended March 31, 2007,
sales in the Mobile/Personal Solutions Business
decreased 23% year on year to ¥965.0 billion.
The main reasons were the sale of the European
consumer PC business, and a major downsizing
of the overseas mobile handset business. In
Japan, there was a drop in mobile handset
shipments arising from intensifying competition
in the mobile handset market. Consequently,
NEC posted an operating loss of ¥33.5 billion in
fiscal 2007, an improvement of ¥21.8 billion from
the previous year’s loss. NEC posted operating
profit of ¥3.8 billion in the second half of the year.
Main Initiatives and
Accomplishments in Fiscal 2007
Reinforce Mobile Handset Earnings Base
in Japan
NEC’s competitive advantage in the mobile
handset field is its advanced technologies in the
3G field. Since commercializing the first 3G
handsets ahead of competitors, NEC has been
at the forefront of this market by developing dual
3G-wireless LAN handsets, followed by HSDPA
handsets in fiscal 2007. However, in overseas
markets, NEC was unable to sufficiently respond
to fierce price-based competition in the GSM
field, amid the slow penetration of 3G technolo-
gies. Accordingly, NEC has decided to focus on
the Japanese mobile handset business for now
and structurally reform unprofitable overseas
mobile handset operations.
In Japan, NEC’s priorities in the near term are
to reinforce its earnings base by reducing
development and other costs, while increasing
mobile phone shipments.
The development volume for mobile handsets
has been growing in step with uptake of faster and
higher-volume communications and increasingly
sophisticated functions. In response, NEC
established two joint ventures in fiscal 2007 to step
up ongoing efforts to boost product development
efficiency. The first joint venture, ESTEEMO Co.,
Ltd., was established by NEC and the Matsushita
Group to strengthen development capabilities
while avoiding duplication of development efforts
by developing a common software and hardware
Mobile/Personal Solutions Business
As Next Generation Networks (NGN) bring the ubiquitous networking
society closer to reality, mobile handsets and PCs will come to serve as
direct user interfaces allowing us all to benefit from the advantages of
such a society. The Mobile/Personal Solutions business covers the
BIGLOBE Internet service and these information terminals, and aims to
provide even more user-friendly terminals and services going forward.
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