Consolidated Results for the Full Year Ended March 31, 2007

Q&A summary

Click on the appropriate question to view the answer.

Information-Related Equipment

Electronic Devices


Information-Related Equipment

  • Q1Your outlook for fiscal 2007 suggests a decline in both net sales and operating income for inkjet printers. What did you gain from your fiscal 2006 strategy of emphasizing printer profitability?
  • AThanks to reductions of fixed costs in fiscal 2006, we were able to achieve more efficient operations from manufacturing through to sales. In seeking to reduce fixed costs, we have made unprecedented advances in standardizing platforms and components. In marketing, we have seen successes in carefully tailoring our efforts for individual regions and customer segments. Because of actions such as these we believe we have strengthened the business structure. We understand that raising market share will be an important issue going forward, and in fiscal 2007 our policy will be to raise our presence and awareness of Epson in the market.
  • Q2What have been the effects of cost cutting in the inkjet printer business?
  • AIn fiscal 2006, we have had success in cutting fixed costs in printer hardware. While we still believe there is further room to cut variable costs, the effects of our cost reductions to date mean we will be able to boost hardware volume without significantly affecting profitability.
  • Q3What are the reasons for the forecasted profit decline in the information-related equipment segment in fiscal 2007?
  • AIn fiscal 2007, our strategy will not simply focus on improving profitability. Instead, we will look to create a balance between profitability and the need to drive growth in fiscal 2008 and beyond. In fiscal 2007, we see a decline in profitability as our efforts to increase volume in markets outside Japan will lead to increased expenditure on sales promotions.
  • Q4What proportion of new printers will contain the next-generation inkjet print head you announced in March?
  • AWe can't go into details for competitive reasons. However, we can say that for the time being the new print head will be used in printers for business and industrial applications.
  • Q5What are the approximate proportions of revenue and profits for large-format printers in the inkjet printer business? How will this change in the future?
  • AConsumer-oriented models make up the majority of sales of inkjet printers, and the proportion of large-format printers is small. However, large-format printers do make an important contribution to profits. We don't see any significant changes in fiscal 2007.
  • Q6What strategy will you adopt in reacting to increasing competition in laser printers brought about by rapid price erosion in North America and elsewhere?
  • AWe will adopt different strategies for Japan and elsewhere. In markets such as North America, we will emphasize products that offer speed, security, and networking capability. Rather than concentrate on the cutthroat SOHO market, our strategy will focus on the high-print-volume business segment. In Japan, because laser printers are more commonplace in the business segment than SOHO, we believe we can compete against other companies by introducing competitive new products.

Printing Solutins

  • Q7Has staff motivation improved as a result of making the display business a fully-owned subsidiary?
  • AMotivation has improved. We believe a major point going forward will be developing a sense of unity throughout the company, and management will make every effort to boost staff motivation.
  • Q8You forecast volume gains for amorphous silicon TFT and LTPS LCDs, but what applications do you see growing? How do you see the market for mobile phone LCDs going forward?
  • AWe anticipate new applications such as high-end smart phones and media players will expand. In mobile phones, we forecast growth in high-end products of QVGA (quarter video graphics array) resolution and above. We believe that high value added products such as these can contribute to profitability.
  • Q9Will you continue to go it alone in the display business if you achieve the forecast results for fiscal 2007?
  • AWe will continue to keep various options in mind and seek to plot the best possible course going forward.
  • Q10Are you considering alliances with other manufacturers in the semiconductor business? What will be your strategy going forward?
  • AFollowing on from fiscal 2006, we will continue to explore various possibilities including alliances with other companies. However, we must first look to increase the appeal of the business. To be more precise, our strategy will be to differentiate by offering products with low-power, and by providing digital/ analog mixed signal ICs. As with one announcement we made earlier in the year, we will look to optimize use of our manufacturing facilities by providing a foundry service to other companies.
  • Q11Will you enter the promising market for semiconductors for use in automotive applications?
  • AWe are in the process of promoting sales for the display, semiconductor and quartz device businesses in automotive applications. Because Epson has the three device businesses, we believe we can grow sales by offering modules including the various technologies.