NEC 2008 Annual Report Download - page 8

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
NEC has already staked out a solid position in the NGN construction field in Japan. The field
of new services, which has strong growth potential, is one where NEC can demonstrate its
strengths in both communications infrastructure technologies and IT. By harnessing this market
growth and achieving an even stronger position, NEC aims to outperform the domestic market
in terms of sales growth.


 Growing overseas businesses is vital to accelerating the pace of growth. In fiscal 2008,
NEC’s overseas sales only accounted for 25% of total sales following downsizing in the wake
of the IT bubble’s collapse, termination of overseas mobile terminals operations and other
actions. But I intend to raise this share to 30% as soon as possible and to 40% thereafter.
NEC has an outstanding track record in Japan’s world-leading NGN market. By harnessing
NEC’s collective IT and network capabilities, I believe we have a perfect opportunity to sharply
grow our overseas business.
NEC’s PASOLINK point-to-point microwave communication system has already been a major
success overseas. Backed by the exceptional manufacturing capabilities of NEC’s plant in Fuku-
shima, PASOLINK has earned high marks for its product quality and performance. Sales volumes
are growing fast atop strong demand from mobile communications carriers for linking mobile
base stations. Thanks to a sharp increase in its market share, NEC captured the No. 1 share*
of the global market for this type of equipment in 2007. Elsewhere, our optical submarine cable
system business is now also much bigger against the backdrop of burgeoning communications
traffic. In addition, we are developing and launching products that are targeted first at overseas
markets. The HYDRAstor grid storage system released in fiscal 2008 is an example. By offering
more of these sorts of competitive products in parallel with effective marketing and targeting,
we aim to continue to expand our overseas business. Leveraging partnerships is another priority.
In this regard, we are actively forming alliances with global partners including Alcatel-Lucent,
SAP AG, Hewlett-Packard Company and EMC Corporation.
*Source: Sky Light Research (Cumulative unit sales from January to December 2007)


 Since 1999, NEC has been implementing a production innovation drive based on the Toyota
Production System. Through this approach, our PASOLINK plant in Fukushima and all other plants
have boosted productivity manyfold by putting their heads together, while at the same time sharing
their production innovations with one another to make further improvements. We are also applying