Yamaha 2008 Annual Report Download - page 32

30 Yamaha Corporation
Business Outline
The AV/IT segment comprises audio and visual (AV) equipment
(including AV receivers, Digital Sound ProjectorTM, HiFi compo-
nents, desktop audio systems and other products), commercial
online karaoke equipment, routers and conferencing systems.
The Company’s AV equipment has acquired a high reputation
among users of home theater systems. Products employ Yama-
ha’s exclusive digital sound field processing technology which
reproduces the original sound fields of performance venues in
listeners’ own homes, enabling them to feel as if they are actually
in a large concert hall or music club.
In the conferencing systems business, Yamaha is leveraging
audio technologies accumulated in the music business for this
new domain, thus aiming to establish a unique business model.
As such, the Company intends to expand into the voice
telecommunications sector by drawing on its exclusive
echo-canceller technology.
Key Policies and Priority Measures in Fiscal 2008
■ Manage AV equipment business in line with market changes
· Expand sales of front surround systems by enhancing product lineup
· Reinforce two-channel HiFi business, focusing on medium- and high-end products
· Develop and launch new varieties of AV products, such as desktop audio systems
■ Reinforce router business and boost its efficiency by integrating sales channels
■ Enhance marketing of conferencing systems in Japan and North America
Fiscal 2008 Highlights
■ Sales of the Digital Sound Projector YSP series were favorable, rising 12.9% year
on year, to ¥7.9 billion
■ Sales of AV receivers declined slightly, due to fierce competition, but overall sales of
HiFi components and desktop audio systems were favorable
■ Sales of conferencing systems were well below expectations, as efforts to develop
sales channels fell behind schedule
AV/IT
Performance Overview
Sales in the AV/IT business declined 2.8% year on year in fiscal
2008, to ¥70.8 billion. Although sales of the Digital Sound Pro-
jector were brisk, this was offset by increased competition in the
AV receiver market and a sharp fall in sales of commercial online
karaoke equipment. Operating income fell 14.0% year on year,
to ¥1.8 billion. Despite the sales shortfall, factors such as favor-
able exchange rates and efforts to cut production costs reduced
the impact on income.
With regard to AV receivers, competition has intensified as the
home theater market shrinks, particularly in developed countries.
Nonetheless, among home theater products, front surround sys-
tems designed for use with flat-panel TVs are enjoying market
expansion both in Japan and overseas. Consequently, sales of the
Digital Sound Projector showed particularly strong growth. HiFi
audio components also recorded steady sales in fiscal 2008, led
by new medium- and high-end products such as amplifiers, CD
players and speakers. In the desktop audio systems market,
Yamaha added new products to its lineup, that posted strong
performances. This move was in response to significant recent
changes in the way people enjoy music, spurred by the increasing
market penetration of portable digital audio players such as the
iPod* and the growth in Internet-based music distribution services.
In the commercial online karaoke equipment field, sales and
income fell sharply during the year, reflecting a contraction in the
overall karaoke market and a cutback on new investment by
karaoke operators as replacement demand fell off.
In the router field, Yamaha worked to boost sales of com-
mercial routers for small and midsized networks by promoting
the use of Virtual Private Networks (VPN). However, the overall
sales and income of routers declined due to a general reduction
in market size.
* iPod is a trademark of Apple Computer, Inc. registered in the United States and
other countries.
04/3 05/3 06/3 07/3 08/3
78,257 77,720 75,939 72,823 70,814
Net Sales
(Millions of Yen)
Digital Sound ProjectorTM YSP-4000
with furniture stand