Kenwood 2006 Annual Report Download - page 8

Advances in digital network technologies for automobiles have created
significant possibilities in the car electronics market. Since its entry into
this market in 1980, the Company, which has emphasized a consumer
business, has launched many innovative and sophisticated products by
leveraging its marketing power, its product planning
ability, and its product development capability based
on technology for high sound quality. In this way,
the Company has built a high brand presence across
the world.
In the consumer audio business, the Company is now expanding its
product lineups to consolidate its global presence by using the latest
digital network technologies. For example, it has developed models that
can connect to the portable digital audio players and USB devices that are
rapidly growing in popularity. Kenwood commercialized a high sound
quality model in which it instilled the essence of the highest fidelity
technology produced by its Sound Meister. In addition, the Company also
commercialized tuners for satellite digital sound broadcast and a tuner for
terrestrial digital broadcast for the first time for consumer use, to begin
full-scale entry into the market. Furthermore, the Company has been
focusing on the development of new markets, mainly in the BRIC nations,
to enhance its revenue base.
In the growing consumer multimedia business, the
Company has developed a user interface oriented
merchandising strategy by adopting touch-sensitive
panels and voice recognition systems earlier than its
competitors. Kenwood established a unique plan to
develop a car navigation system that incorporates Microsoft® Windows®
Automotive Ver. 4.2 as a car operating system for the first time in Japan,
and the Company is now delivering new types of products to the market,
including commercialization of an HDD car navigation system directly
connectable to Apple Computer’s iPod for the first time in the industry, and
a car navigation system with an AV system that delivers sophisticated
sound quality. The Company has also developed a new concept car
navigation system that combines a portable navigation system with a
TV/DVD receiver, and is focusing on the development of multimedia
products such as those compatible with terrestrial digital broadcast, which
is expected to spread in the near future.
In the OEM business, Kenwood is further pursuing
its advantage of high quality sound, while at the
same time it is attracting new customers and rapidly
expanding global operations by taking advantage of
its advanced technologies, its product planning and development
capabilities, its reliability, and its brand presence which are recognized in the
consumer market. In addition, the Company has strengthened its presence
not only in the finished product business but also in the component business
and has enhanced its development and production system through
aggressive up-front investments. For example, the Company increased its
production capacity by expanding the Shanghai Plant, and it built a new test
course at Nagano Plant. Furthermore, the Company is working hard to
boost business competitiveness and to increase profitability by promoting
vertical integration among Japanese plants and overseas plants, and by
transferring the production lines for components to overseas plants.
Since its foundation, the Company has operated the Communications
Equipment (wireless radio equipment) business using the high-frequency
technology, developing proprietary techniques and high know-how in the
field of “wireless radio (= communication)”, which is not included in the
Car Electronics and Home Electronics businesses.
The Company has increased its market share of
commercial wireless radio equipment, becoming the
world’s second largest supplier. To achieve this, the
Company has speedily complied not only with
various countries’ laws and regulations on radio waves but also with
digitization of radio equipment, which requires cutting-edge technologies.
The Company has supplied radio systems that require extremely high
reliability, privacy and security, durability and operability to the Team
McLaren Mercedes Formula One (F1) auto-racing team as an official
supplier for 16 years.
The Company now focuses on the businesses of wireless radio
equipment, including primarily commercial wireless radio systems as well
as amateur wireless radios and specially-designated low power
transceivers. In addition, the Company has reinforced its business base in
the U.S., the largest market for Kenwood, where it is enhancing the
cooperative system of marketing, sales, development and production and
further shifting from being a manufacturer of
terminals to becoming a provider of system
solutions.
Kenwood is expanding its operations in Asia,
particularly China, where spectacular growth is
forecast, and the regions in which growth is projected, including East
Europe, particularly Russia, the Middle East, Latin America and Africa.
Meanwhile, the Company is actively carrying out a growth strategy
through strategic alliances and M&As. As part of this strategy, the
Company acquired the wireless radio operations of Toyo Communication
Equipment Co., Ltd. in June 2004. With this acquisition, the Company
can now supply a large number of products to public agencies and power
utilities, as well as utilize networks and huge resources or technologies
relating to radio equipment operations. It is now expanding its radio
equipment business in Japan.
Meanwhile, the digitization of the wireless
communication system has been promoted in the
commercial wireless radio field. In response to this,
Kenwood has been vigorously promoting R&D in
digital wireless radio systems. For example,
Kenwood completed the introduction of the digital wireless radio system
for use in F1 races and produced commercial digital wireless radios in
compliance with Project 25 (commercial digital wireless radio system for
public safety institutions such as police and fire departments) that has
already been commercialized. In addition, Kenwood will further accelerate
digitization of commercial wireless radio systems through its technical
alliance with Icom Inc. and the new consortium including Trident
Microsystems, Inc. of the U.S. with respect to research and development
on wide-ranging digital wireless radio systems establishing a position as
number two in the world in this area.
In pursuit of further value creation by integrality our three core business
segments and establish “Mobile & Home Multimedia System” business
Car Electronics Business Communications Equipment Business
Three Core Businesses
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