Alpine Electronics, Inc. Business report FY2007

Business Highlights

Financial overview (in millions of JPY)
FY2007 FY2006 Rate of Change(%) Factors
Sales 252,071 265,054 (4.9) -The overall figures were down year-on-year because the volumes the Company supplied to automakers declined as a result of the slowdown in the US economy and the result of automakers' making model changes to their vehicles.
Operating income 7,000 10,110 (30.6)
Ordinary income 6,403 12,015 (46.7)
Current net income 3,554 5,729 (38.0)
Audio systems division
Sales 123,637 130,090 (4.9) -Even though sales dropped year-on-year, the Company was successful in having its new technology installed in new media formats and DVD audio systems equipped in SUVs sold in North America; having its CD audio systems installed on new vehicle models sold in the BRIC countries; and seeing solid sales of sound systems that feature a greater number of functions that operate even under severe onboard conditions.
-Operating income was down because European automakers revamped a series of their vehicles; the market is seeing a higher penetration of car communication systems being used; and market needs are shifting from individual car audio units to integrated units comprised of AV and navigation systems.
Operating income 5,359 9,961 (46.2)
Information/communication systems division
Sales 129,498 136,108 (4.9) -Sales were down because the volumes the Company supplied to automakers declined. Operating income was up as a result of the Company's selling a greater number of factory-installed car navigation systems and integrated units due to a shift in the market to compact cars.
Operating income 9,478 8,856 7.0


-Out of the total amount (27,191 million JPY) that the Company spent on R&D activities, it spent 7,631million JPY in the Audio System Division and 19,560million JPY in the Information/Communication System Division.

Technical Alliance
-The Company, Oki Electric Industry Co., Ltd. and Runcom Technologies Ltd. - an Israeli electronic equipment manufacturer - announced that they jointly developed a new car navigation system compatible with the next-generation high-speed wireless communication standard "WiMAX". The three companies disclosed the world's first WiMAX car navigation system at International CES 2008 in Las Vegas from January 7th to 10th. The new in-vehicle navigation system can provide stable broadband communications on a fast-moving car so that a driver may download streaming contents and promptly update map information. Oki developed a prototype mobile WiMAX terminal using Runcom's "RNA200" LSI (large-scale integration). The unit is connected to the Alpine car navigation system with a USB interface. (From an article in the Nikkan Jidosha Shimbun on Jan. 9, 2008)

-The Company said on February 19 that it has signed a patent cross-licensing agreement with U.S. software giant Microsoft Corp. Under the agreement, the two companies will expand sharing of their respective patented technologies and information for car navigation systems, home appliances and other electronics products. Through this agreement, the Company is looking forward to "creating navigation and information systems that meet the advanced performance expectations" of today's market. Microsoft also said, "These cross-licensing deals support the further development of technological innovations and industry collaborations." (From an article in the Nikkan Jidosha Shimbun on Feb. 20, 2008)

Licensing of technology from other companies (As of March 2008)
Contract signed with Country Contract details Contract period
Laboratories Licensing Corporation
U.S.A. Licensing of patent rights related to noise reduction devices for tape recorders etc.
From Jan. 1, 1977 until the termination of patent period
Koninklijke Philips Electronics NV. Netherlands Licensing of patent rights related to DVD players
From Oct. 12, 1999
To Oct. 11, 2009
Thomson S.A. France Licensing of patent rights related to DVD players
From Oct. 1, 2000
To Sep. 30, 2005
After that, renewed every 5 years automatically.
Toshiba Corporation Japan Licensing of patent rights related to DVD players
From Dec. 31, 2000
To Dec. 31, 2007
MPEG LA LLC U.S.A. Licensing of patent rights related to DVD players
From Jan. 1, 2002
To Dec. 31, 2010

Investment Activities

-Total capital investment in FY2007 was 8,068 million JPY.

Audio Systems Division
Capital investment in FY2007 was 13,673million JPY.

-The Company invested 2,401 million JPY for tangible fixed assets, mainly dies; and 1,290 million JPY to develop software.

-The Company invested 1,193 million JPY in production equipment in Europe in order to strengthen its product supply network so as to expand the volume of direct product offerings it could supply to automakers. and meet quality requirements of customers.

-The Company invested 169 million JPY for production facilities in North America to reinforce production operations. This included launching in-house production of nose pieces.

-The Company invested 110 million JPY in its production facility in Thailand, Alpine Technology Manufacturing (Thailand) Co., Ltd., to install new equipment that enables the Company to increase its production volume. The investment made in Thailand will also be used to improve the environment.

-The Company invested 729 million JPY in its production facility China, Taicang Alpine Electronics Co., Ltd., to boost its production capacity in order to handle increased production volume.

Information/Communication Systems Division
-Capital investment in FY2007 was 5,452 million JPY.

-The Company spent 2,307 million JPY for capital investments in this division in order to develop new products; and to expand and rationalize production operations.

-The Company spent 1,240 million JPY to build an information network within the Company.

-In order to raise its capacity in North America, the Company invested 280 million JPY.

New Facility
Name Location Type of facility Planned investment amount (million JPY) Starting date Planned completion
Alpine Electronics, Inc. Iwaki city,
Fukushima Pref.
machinery/ apparatus 1,250 Apr. 2008 Mar. 2009
Industrial tools, equipment, and dies 3,538
Alpine Electronics Manufacturing of Europe LTD. Biatorbagy,
machinery/ apparatus 1,367 Apr. 2008 Mar. 2009
Dalian Alpine Electronics Co. Ltd. Dalian, China machinery/ apparatus 664 Apr. 2008 Mar. 2009
Alpine Giken,Inc. Iwaki city,
Fukushima Pref.
building 604 Apr. 2008 Mar. 2009