Hitachi 2006 Annual Report Download - page 24

Download and view the complete annual report

Please find page 24 of the 2006 Hitachi annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 90

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90

Hitachi, Ltd. Annual Report 2007
22
Software and Services
In software and services, sales rose year
on year. Software sales were on a par with
the previous fiscal year. While lower de-
mand for mainframes brought down sales
of platform software, sales of middleware
were healthy, particularly system operation
management software.
Services recorded higher year-on-year
sales due to strong growth in solutions for
financial institutions and in the outsourcing
business.
Earnings increased due to healthy
earnings growth in services in line with
higher sales.
Hardware
Hardware sales increased from the previ-
ous fiscal year. Storage products posted
higher sales, reflecting healthy growth in
mid-range disk array subsystems, espe-
cially overseas, in addition to significantly
higher sales in HDDs. Server operations
also saw sales rise on the back of marked
This segment recorded a 5% year-on-year increase in
revenues, to ¥2,472.2 billion (U.S.$20,951 million), the result
of growth in services, disk array subsystems and HDDs
(Hard Disk Drives). Operating income, however, dropped
29%, to ¥60.3 billion (U.S.$511 million), mainly due to a
wider loss in HDDs.
Information & Telecommunication Systems
Review of Operations
1 Terabyte 3.5-inch HDDSmall size finger vein
authentication device
growth in blade servers. Contrastingly, PC
operations posted lower sales, reflecting
the transfer of products for personal use to
the Digital Media & Consumer Products
segment. Telecommunications also
recorded lower sales, mainly as a conse-
quence of sluggish demand for routers in
the Japanese market.
Hardware operations posted a loss, after
a positive result in the previous fiscal year,
despite a healthy rise in earnings in disk
array subsystems. This result was due to a
larger loss in HDD operations resulting from
lower prices, and substantial investments in
the development of next-generation tele-
communications equipment and servers.
In February 2007, Hitachi sold part of its
stake in subsidiary Opnext, Inc. following
the company’s listing on the NASDAQ
stock market in the U.S. As a result, this
company, which offers optical components
for communications applications, is now
treated as an equity-method affiliate for
accounting purposes.
A large disk array subsystem