Kenwood 2002 Annual Report Download - page 16

KENWOOD Corporation Annual Report 2002
14
Financial Review 2002
addition, the Company is aggressively expanding its OEM
business in and out of Japan, both in terms of the number of
customers and the number of products.
Communications Equipment
Sales of communications equipment for the term under review
were up by 17.6% and amounted to 84.2 billion yen. Although
cellular phone and home telephone performance improved over
the previous term thanks largely to three new cellular phones,
these businesses will be terminated at the end of March 2003
because of dwindling profits and increasing risk in the
development of new models. In the meantime, Kenwood will
further augment its efforts to increase market share for wireless
radio products, of which sales and profitability are both stable,
by aggressively introducing new products in Europe, China,
Japan and other Asian markets, in addition to land mobile radio
(LMR) products that are performing well in the US.
Cellular Phones and Home Telephones
Sales of cellular phones and home telephones for the year
ended March 2002 increased by 29.2% to 45.3 billion yen and
recorded an operating income of 0.5 billion yen, an
improvement of 2.4 billion yen from the previous year. The new
product development system for cellular phones, the
establishment of which had been one of Kenwood’s priorities
the past few years, resulted in three new PDC phones during
the year and this produced record sales in this product
category. Also effective was the fact that one of the three
models was a new concept model called a “Simple Phone,”
having fewer features but very easy to use. In the home
telephone category, the market is currently divided between
conventional cordless telephones with an answering machine,
and L-mode telephones with Internet connectivity. Kenwood
concentrated its power in the manufacture and sale of low-
priced conventional telephones and had a good turnover.
However, in consideration of the market maturity and increasing
risk in product development, the Company plans to terminate
the cellular phone and home telephone businesses by the fiscal
year ending March 2003.
Wireless Radio
During the year ended March 2002, sales of wireless radio
products increased by 6.4% from the previous year to 38.9
billion yen, and operating income by 35% to 7.6 billion yen.
The major force in this product category is land mobile radio
(LMR) sold in the US, Europe, and Asia (including Japan).
Currently, Kenwood is putting more emphasis on systems
integration, such as equipment used at base stations, building
on its foothold established by the sale of mobile terminals.
During this fiscal year, a new compact LMR was introduced in
the European market and contributed to the increased sales. In
China and other Asian countries, the Company succeeded in
expanding its market by the introduction of a low-cost mobile
transceiver for truck and taxi drivers. In Japan, it is successfully
Sales of Cellular Phones & Telephones Sales of Wireless Radio
0
2002
20 40
0
2002
20012001
20002000
19991999
19981998
20 40
Communications Equipment
Sales
27.8%
(Billions of yen) (Billions of yen)