Yamaha 2006 Annual Report Download - page 20

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cater from children’s lessons to adult hob-
bies. Yamaha synthesizers are rated highly
by artists worldwide. As a world leader in
sound-generation technology, Yamaha
manufactures products that excel in quali-
ty of sound, functionality, and operability.
In fiscal 2006, Yamaha launched TyrosTM 2,
a high-end portable keyboard, to favorable
market response in Germany and other
European markets. Sales of the MO series
of synthesizers also expanded steadily.
The CLP-F01 model in the ClavinovaTM
range, launched in December 2004, con-
tinued to sell well, most notably in Europe,
based on its novel and attractive design.
The high-end ElectoneTM model,
STAGEATM, which was introduced in
March 2004 suffered from a drop in
demand, despite making a strong contri-
bution to sales in the previous year.
Hybrid instruments are expected to
create an entirely new market by combin-
ing the best qualities of acoustic and digi-
tal instruments. In this sense, these prod-
ucts are the category that makes the
most of Yamaha’s technology and know-
how. The DisklavierTM Mark IV series of
player pianos continues to sell well in the
United States. But competition is set to
intensify in this high-end segment as the
market for introductory models grows. By
enhancing the network capabilities of
such products, Yamaha hopes to expand
their sales based on their enhanced
teaching possibilities, such as music les-
sons over a network. Also, in fiscal 2006
Yamaha added a moderately-priced
“Silent PianoTM” to the “SilentTM Series” to
make the range more accessible to con-
sumers. These instruments use advanced
sound muting technology to allow players
to enjoy them anywhere without worrying
about time or place.
Music school and English language
school operations
Yamaha operates music schools in more
than 40 countries. Its aim is to expose as
many people as possible to the joy of
music. Global enrollment at Yamaha
music schools is nearly 700,000 students.
In Japan, the number of children enrolled
in Yamaha music schools grew for the
second consecutive year in fiscal 2006.
Adult enrollments were also strong, which
led to an overall increase in enrollment
numbers. Major factors have included the
development of the UnistyleTM range of
music schools offering various high-quality
services in suburban locations that match
changing needs and lifestyles and televi-
sion commercials targeting student recruit-
ment. Another reason is that Yamaha is in
the process of forming 100 music schools
specifically for adults.
In line with the increasing need for
English-speaking ability, the Company’s
English language schools, which are only
in Japan, are also recording steady
growth in student numbers despite fierce
competition.
Sales growth in China
The market for musical instruments in
China continues to expand. This is largely
because of that country’s high economic
growth rates and the effects of various
national projects such as the Beijing
Olympics (2008) and the World Exposition
in Shanghai (2010). The market has huge
potential next to Japan, North America
and Europe. Yamaha is developing its
business in China by targeting the medium
and upper end of the market, focusing pri-
marily on pianos, wind instruments,
portable keyboards, and professional
audio equipment.
To compete more effectively with
the low-priced models made by Chinese
piano manufacturers, Yamaha began
manufacturing operations at a local
subsidiary in Hangzhou in autumn 2004.
This factory supplies pianos for the
Chinese market and has seen its pro-
duction and sales levels rise steadily.
A second plant is due to come
onstream in spring 2007 and will double
Yamaha’s annual piano production
capacity in the subsidiary to 40,000
units. Yamaha is working to bolster
productivity by reducing costs to
strengthen price competitiveness.
In addition to upgrading production
facilities, Yamaha has focused on enhanc-
ing its retail sales network in China by pro-
moting new Yamaha piano retailers,
including the establishment of Yamaha
corners, during the period. The number of
Yamaha piano retailers now stands at 40.
And to elevate its brand image in China,
Yamaha started a television advertising
campaign in summer last year, and partici-
pated in an international exhibition of musi-
cal instruments in Shanghai.
A local Yamaha subsidiary com-
menced music school operations in
Shanghai during the year under review.
In China, where private lessons are the
norm, the introduction of the Yamaha
system in which children are accompa-
nied by their parents for group lessons
has major significance. Plans call for
expanding the school network within
Shanghai, followed by investment in a
national chain. As in other markets,
the development of the music school
business promises to have a major
positive effect on brand image, thereby
enhancing the growth of Yamaha’s
China operations overall.
Review of Operations Musical Instruments
Silent CelloTM SVC-200 Digital workstation TyrosTM 2Music production synthesizer MO8