Kenwood 2000 Annual Report Download - page 5

large sales decrease in cellular phones and the
sharp appreciation of the yen mentioned above.
In addition, Kenwood depreciated ¥3.1 billion
for securities priced lower than book value, and
disposed of unusable inventories of ¥2.9 billion,
incurring the above net loss.
Prospects for the IT Era
As described above, Kenwood performed
disappointingly in the period under review due to
the stronger yen and a large sales decrease. The
company is undertaking various projects to
restore profitability in its business operations, but
prior to presenting details of these undertakings,
this section focuses on general trends in the
electronics industry and the company's mid-term
business prospects.
Hardware for Diverse Multi-media Contents
The worlds of audio-visual (AV) equipment and
communications equipment are experiencing
tumultuous changes, the likes of which no one has
ever seen, the key phrase being the "IT revolution."
One must have access to content, or intellectual
property such as music and videos, in order to use
AV equipment, and people must have access to
services provided by carriers in order to use
communications equipment such as cellular
phones. These services and content will, without a
doubt, be reorganized and structured using a
digital network like the Internet. If so, AV
hardware and communications equipment must
function as a gateway to access various multi-
media services on the network.
Focusing on IT in Product Planning
Kenwood believes that IT can only be built upon
superior hardware, and is committed to developing
products that will guide people into the future of
the IT world. One such example is a car audio
player with a built-in MP3 decoder, which was
introduced in February 2000, that enables sharing
the same data on both PCs and the car audio.
Meanwhile, in the field of home audio, it is
expected that IT will be blended with existing
media such as DVD, CD, and MD, at least for the
immediate future. As seen in our introduction of a
prototype MD-radio-cassette player that connects to
the Internet, the company is concentrating its
power to develop unique audio products to take
advantage of the future network distribution of
music.
Moreover, in connection with the rapidly
progressing digital broadcasting field, Kenwood
signed a contract in March 2000 to develop
receivers for mobile units with SIRIUS Satellite
Radio of the US. With this, we are building on the
success we have had with DAB receivers in
Europe.
Focusing at Original Technologies
In order to formulate products that have a
technological edge, Kenwood is placing priority
on making key components based on our own
proprietary technical breakthroughs.
The optical microphone, for example, is one
such innovative device that has gained a lot of
attention from a variety of manufacturers in
different industrial fields. The optical microphone
evolved after considerable efforts were expended
in joint research with Phone-Or Ltd. in Israel.
Since its official introduction, it has attracted a
remarkable number of inquiries for applications in
various industries due to its sensitivity, sound
quality, compact design, and, above all, amazing
directionality unthinkable in conventional
microphones. The company is drawing up further
development and marketing plans to make this a
new global standard for microphones.
Another example is "high quality CODEC",
developed solely by Kenwood for network
distribution of music. The new CODEC was well
received by the major recording labels in Japan
and the US, and is believed to be the key player in
improving the quality of sound both on the
network and in stand-alone players.
KENWOOD Corporation Annual Report 2000
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