NEC 2008 Annual Report Download - page 7

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



 During fiscal 2008, ended March 31, 2008, NEC produced solid results by working to
strengthen its earnings power and growth potential toward the objectives set for the fiscal
year—achieving our operating income target and implementing growth initiatives.
Regarding strengthening our earnings ability, we successfully restored operating profitability
in both the semiconductor and mobile terminals areas, which have been unprofitable in the past
few years. NEC’s IT/Network Solutions business, which is a steady source of earnings, also
posted higher earnings year on year. In fiscal 2008, operating income and net income both more
than doubled to ¥156.8 billion and ¥22.7 billion, respectively.
Regarding strengthening our growth potential, we roughly doubled sales related to the
construction of Next Generation Networks (NGNs), which will play a pivotal role in these fields.
In addition, NEC implemented growth initiatives such as forming alliances to expand businesses
globally and development activities to fortify strategic fields.
Nevertheless, I’m still far from satisfied with this level of performance. Going forward, we
seek to further enhance our performance by translating our initiatives into growth.



 NEC sees NGN-related businesses as encompassing a broad range of fields. Looking at
communications networks alone, NGN involves more than just the conversion of fixed-line com-
munications networks into IP-based networks. It also encompasses major trends such as the
convergence of fixed-line and mobile communications networks and the fusion of communica-
tions and broadcasting, not to mention the widespread adoption of next-generation mobile
communications technologies such as LTE and WiMAX expected in the near future. Furthermore,
service platforms that provide authentication, billing and other capabilities needed by commu-
nications carriers to offer a variety of services will be constructed over communications networks.
NGNs are reliable networks that differ completely from past networks in terms of being able to
guarantee communications quality and ensure tight security. Therefore, NGNs offer further
growth prospects as companies and the public sector draw on these advantages to offer new
services. NEC believes that solutions for these companies and the public sector, not to mention
demand for constructing communications networks, present major business opportunities.