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TOSHIBA ANNUAL REPORT 1999
Page
2.
THE FISCAL YEAR IN REVIEW
Fiscal 1998, the year ended March 31, 1999, was a tough one for Japan and for Toshiba.
Japan’s economic situation remained severe. Despite the government’s
economic stimulus packages and increased public spending, unemployment edged
up and real income levels fell; consumer spending slowed and the property market
remained subdued. Capital expenditure in the private sector also fell sharply. The
cumulative result was negative GDP growth for the second year running.
Overseas, the U.S. economy recorded another year of expansion. Europe was less
buoyant and growth slipped down a gear. Asia continued to battle back from its finan-
cial crisis and the latter half of the year brought positive news in some key sectors,
though the big picture remained one of soft demand and sagging export growth.
In this difficult operating climate, our priority on preserving profitability was
undermined on many sides. Anemic private-sector demand in Japan had a major
impact, as did a precipitous price decline in semiconductor memories, sluggish
demand for semiconductors for consumer products, price erosion in PC peripherals
due to the increasing popularity of low-priced PCs, and soft sales of power plant and
equipment. The result was a 3 percent year-on-year decline in consolidated sales
and a ¥13.9 billion (US$115 million) net loss.
REINVENTING TOSHIBA IN A FAST–CHANGING MARKETPLACE
We operate in highly demanding, fast-changing businesses across the global elec-
tronics industry. The Internet and network technologies are changing the ways in
which information is gathered and processed and how products and information are
merchandized. Corporate consolidations and reorganizations are driving change in
the power generation and industrial systems businesses; transnational and trans-
regional M&As are reforming communications, broadcasting and services. The
speed, dynamism and extent of these shifts are breathtaking.