Yamaha 2005 Annual Report Download - page 26

24 Yamaha Annual Report 2005
sound lifestyles
Business outline
Yamaha applies wood-processing expertise and coating
technologies developed from piano manufacturing opera-
tions along with unique chemical-processing and original
equipment-developing-technologies to the creation of sys-
tem products for the home such as kitchens and bath-
rooms. Yamaha Livingtec Corporation is the main consoli-
dated subsidiary operating in this segment.
Fiscal 2005 performance
Sales dropped sharply in the first half of the year owing to
the delayed launch of lower-priced system kitchens and
bathrooms. The introduction of new products in the sec-
ond half of the year gained back a part of what had been
lost, but segment sales for the whole year declined 4.3%
year-on-year to ¥42,844 million. The segment showed an
operating loss of ¥24 million compared with operating
income of ¥1,462 million in fiscal 2004.
Technical innovations
One area where Yamaha has a clear advantage is in tech-
niques for artificial marble. Yamaha has developed its own
technology to form components in almost any shape. In
October 2004, Yamaha introduced new system kitchens
featuring marble sinks that fit seamlessly with the marble
counter. More stylish, practical and easier to clean, these
have become a popular choice among customers.
Yamaha now plans to apply this technology to basins also.
Another innovative kitchen product developed by
Yamaha is a C (cyclone) hood designed to keep the range
extremely clean. Vortices created inside the hood expel
smoke and particles through gates situated on the sides.
This mechanism ensures that the inside of the hood
attracts only small amounts of oil and dirt.
For the bathroom, Yamaha has developed a sauna
that applies the theory of mist formation to create special
clouds of water particles of just three microns in size. At
this diameter, which is less than 1% of the size of the water
droplets produced by an atomizer, the mist not only
humidifies the skin but also washes wastes out of the
pores. This additional cleansing benefit makes the sauna
ideal as a beauty treatment. Tests conducted by research
institutes and leading beauty salons in Japan have scientifi-
cally documented these effects.
Market trends and business strategy
The market for home equipments in Japan segments
between new construction and remodeling. Requirements
also differ between the separate markets for houses and
condominium developments. Yamaha mainly develops and
sells products for individual houses.
Amid persistently low growth in domestic demand,
builders targeted the young second-generations of baby-
boomers, who increasingly dominate the market for new
houses. Therefore, pressures to cut prices remain fierce.
This has negatively affected Yamaha, whose products are
at the medium-to-luxury end of the market.
The home remodeling market is growing rapidly. In this
market, the consumer frequently makes the final choice.
Yamaha continues to work to expand its product lineup for
the needs of this market and to build awareness of its
product range.
Recognizing past failures to keep the product range in
tune with the needs of a changing market, in April 2005 the
Review of Operations Lifestyle-Related Products