Epson 2007 Annual Report Download - page 48

46 Seiko Epson Corporation
(4) Epson might experience a reduction in the market for Epson-brand consumables
Consumable products for inkjet printers, especially ink cartridges, are particularly important to Epson’s
sales and profit. There are third parties who supply ink cartridges that can be used in Epson printers.
These alternative products are generally sold at prices cheaper than Epson’s brand products, and they
have high market share in Japan and the United States but even more so in Europe and developing coun-
tries. Such third parties will continue to expand their share of the market for these alternative products in
the future, so for Epson to remain competitive, it might have to lower its prices of such consumables.
In responding to such risks as a decline in its share of the market for Epson-brand products and a
reduction in prices, Epson has introduced onto the market, in accordance with the demands and tastes of
consumers in each region, its own products that appeal to consumers searching for quality and ease of
use. For example, Epson aims to maintain and improve the quality of its products, striving to boost their
user-friendliness, such as by using even longer lasting ink and an array of single-color ink cartridges.
Epson will also take legal measures if any of its patent rights or trademark rights it holds over its ink car-
tridges are infringed.
There is no assurance, however, that any of these efforts will be effective, and if Epson’s profit from
consumable products for inkjet printers declines because, for example, in the future the market share
occupied by the alternative products increases further or Epson must reduce the prices of its brand prod-
ucts, then Epson’s results might consequently be adversely affected.
(5) A change in the market could affect Epson
Epson is focusing its managerial resources into its “3i” business domains, which comprise the three busi-
nesses Epson believes have high growth potential: imaging on paper (“i1”), imaging on screen (“i2”) and
imaging on glass (“i3”). It is engaged in its strategy of establishing ties among and bringing together its
finished products and devices businesses while continuing to expand its myriad areas of business.
1. imaging on paper (“i1”)
This business aims to break away from the traditional idea of the printer being merely a computer peri-
pheral and to decentralize printing by printers. For example, it intends to increase the opportunities for
printing directly from mobile communication devices and digital cameras without having to connect to a
computer and aims to have printers perform tasks such as printing analog photographs, making copies
and performing tasks conventionally carried out by commercial printing companies.
2. imaging on screen (“i2”)
In addition to further enhancing the presence of Epson projectors in the business market, by capitalizing
on the move toward digital broadcasting and the increase in quality of image contents, Epson aims to
expand its business market and push further into the markets for home entertainment.
3. imaging on glass (“i3”)
Epson has concentrated management resources on the market for mobile communications devices as it
aims to develop novel technologies and new applications, such as small and medium-sized LCDs that
stand out as unique from the rest and organic light-emitting diode (OLED) displays. Epson will also seek to
further build on and expand its inherent strengths and, through a fusion of such things as semiconductor
technology and color image display technology, aims to create technologies that cannot be copied by
other companies, and utilize them in creating new products.