Canon 2007 Annual Report Download - page 62

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innovation activities. Additionally, regarding product quality,
which is always the top concern of a manufacturer, Canon will
strategically undertake product quality innovation activities to
augment its ability to deliver safety, security, and satisfaction to
our customers.
To enhance its future-oriented R&D, Canon will strengthen
companywide strategic functions related to R&D under an
organizational structure starting form during the current fiscal
year, and focus on areas like technology development for
future product and research on future technologies.
Canon will also accelerate the development of various kinds
of displays to promptly establish the display business because
the development of new core businesses is essential for realiz-
ing sound growth of its business.
Additionally, because compliance is a key requirement for
Canon to continue to prosper as a truly excellent global
company, Canon will take measures that go beyond those
Canon has taken in the past to ensure that all executives and
employees thoroughly understand and implement Canon’s
compliance practices.
Business machines segment
Office imaging products
In the office imaging products segment, it has become more
important to provide added value in the form of networking,
integration, color printing, and multifunction models. Also, in
addition to the stable market for mid-segment office products,
Canon expects that the market for higher-end models and
low-end multifunction models will expand. The market for
color digital devices continued to grow rapidly, and sales of
monochrome digital MFDs were stable, reflecting the market
trend shifting from single-function to multifunction. Recently,
there has been a new, printer-based multifunction printer
(“MFP”) market created by printer vendors as they seek to
enter the copier and MFD market.
To maintain and enhance a competitive edge and to meet
more sophisticated customer demands, Canon is strengthening
its marketing capabilities by reinforcing its hardware and soft-
ware product lineups and by improving functionality. In 2007,
Canon strengthened the product lineups of its color digital
devices as well as its monochrome machines and maintained
its market share by executing business strategies in line with
current market trends.
Computer peripheral products
In the Inkjet printer market, Canon expects a continuation of
declines in market prices, slowdown in market growth, and a
shift from single-function printers (“SFP”) to MFPs. To manage
these trends, Canon launched new lineups of SFPs and MFPs
from flagship to entry models in order to expand its printer sales.
Canon’s laser beam printer business holds a strong position
in the market. In the monochrome laser beam printer market,
Canon expects that the transition to a low price segment will
expand sales in the micro-business/home office market and in
the emerging markets. In the color laser beam printer market,
Canon expects continued strong growth in demand. In general,
competition will become more intense as competitors implement
aggressive price strategies in order to establish themselves as
market leaders. Canon seeks to remain competitive by develop-
ing technologies that can be deployed in a timely fashion to
produce innovative products in all segments. Canon is also
working to lower costs by automating production of consum-
ables and to secure procurement of essential parts through
internal sourcing.
Although Canon expects that the size of the scanner market
will continue to contract, the “Cano Scan 8800F” which is based
on CCD technology and the “Canon Scan LiDE 90” incorporat-
ing Contact Image Sensor technology were both introduced in
fiscal 2007 in order to increase Canon’s share of this market.
Business information products
As for document scanners, adoptions of internal information
management systems by corporations, and other factors are
driving a worldwide movement to digitize documents and the
market for low-priced, compact scanners continued to expand.
Under these circumstances, as for the “DR Scanner Series,”
Canon introduced the compact, affordable “image FORMULA
DR-2510C” in Japan and the “ScanFront 220P,” which is
capable of distributing scanned images over a network, in Japan
and overseas, and worked to expand sales of these products.
As a result, sales have steadily increased in fiscal 2007.
With regard to servers and personal computers, demand
from corporate clients in the Japanese market held steady in
fiscal 2007, but a decline in sales was caused by Canon’s
change in marketing strategy from selling single products to a
solutions business involving combinations of various products.
This trend is expected to continue in fiscal 2008.
Cameras segment
The entire digital camera market continues to expand. While
the growth rate has slowed in Japan and the United States,
emerging markets, especially China and Eastern Europe, have
experienced strong growth. In addition, the emergence of
digital imaging systems has contributed to this growth as well,
such as PC-free direct printing systems, by expanding the
digital imaging functionality through network connectivity,
along with the improvement of the user-friendly image
processing interfaces and software.
The digital camera industry is seeing growth on various
fronts. As with most other digital consumer electronics, the
digital camera market is now confronted with a fierce price
war and intensified technological competition in terms of
picture quality and functions. Profit margins have been
shrinking for the overall industry, but Canon has been able
to maintain higher margins through reforms of its production
and procurement systems.
Canon expects the market for compact digital cameras to
expand in the intermediate term. However, profit margins for