Financial Overview

(in millions of JPY)

	FY2010	FY2009	Rate of Change(%)	Factors
Overall
Sales	201,257	168,586	(14.3)	-
Operating income	11,155	200	-	-
Ordinary income	10,771	807	-	-
Current net income	6,029	(1,249)	-	-
Audio systems division
Sales	70,534	71,029	(20.3)	-Sales of the Company’s own-brand products designed for auto makers increased due to the strong recovery in production and sales of new vehicles by major customers in the North American and European markets, and due the strong trend in the volume of products targeted to the Chinese market.
Operating income	3,609	1,096	-
Information/communication systems division
Sales	131,518	98,339	(9.4)	-The Company posted increased sales of its own-brand products due to the rising percentage of the Company’s onboard product content in cabin-interior displays, and due to increased unit-sales. This was in line with the recovery in production and sales in the North American market of luxury and large-sized vehicles, in which the Company’s onboard content ratio of multi-functional devices such as car-navigation systems rose. It was also due to the growing trend of European luxury-car makers enjoying strong sales of new cars in China.
Operating income	12,062	3,833	-

 

Company Reorganization

- The Company will enhance its business structure in China. The company, which operates production facilities in the country, is going to strengthen its local development function and reorganize its sales and marketing operations to improve the autonomy of its Chinese business. This move will allow the company to better respond to the market needs, as "inquires from Chinese automakers are increasing", says president Toru Usami. Alpine's Chinese operations will start developing car navigation systems in addition to developing and producing car audio systems. Sales at the company's in-vehicle electronic device business currently make up more than 10 percent of its end-market sales. Although a significant increase is seen in the Chinese auto industry in terms of sales volume, the market has yet to grow to the level where high performance navigation systems widely used in Japan become equally popular. By localizing its development function, Alpine intends to develop products that best meet the needs of Chinese customers in a short time at low cost, which, the company expects, will boost its sales volume. (From an article in the Nikkan Jidosha Shimbun on October. 5, 2010)

Outlook for FY2011

(in billions of JPY)

	FY2011 (Forecast)	FY2010 (Actual)	Year-on-year Fluctuation
Sales	190	201.2	(11.2)
Operating income	5	11.1	(6.1)
Ordinary income	5	10.7	(5.7)
Net income	3	6.0	(2.5)

R&D Expenditure

(in millions of JPY)

	FY2010	FY2009	FY2008
Group	16,251	18,191	26,390
Audio System Division	2,927	3,247	6,864
Information/ Communication System Division	13,323	14,944	19,526

The Company conducted R&D activities in its OEM Business targeted to Japanese and non-Japanese car makers, developing and introducing AVNC systems that are becoming more popular worldwide; and working to respond to product developments on displays targeted to the expanding North American market.

Licensing of Technology from Other Companies

(As of Mar. 31, 2011)

Contract signed with	Country	Contract details	Contract period
Dolby Laboratories Licensing Corporation	U.S.A.	Licensing of patent rights on noise reduction devices for DVD players etc.	From Jan. 1, 1977 until the termination of patent period
Koninklijke Philips Electronics N.V.	Netherlands	Licensing of patent rights on DVD players	From Oct. 12, 1999 To Dec. 27, 2012
Thomson S.A.	France	Licensing of patent rights on DVD players	From Oct. 1, 2000 To Sep. 30, 2005 After that, renewed every 5 years automatically.
Toshiba Corporation	Japan	Licensing of patent rights on DVD players	From Dec. 31, 2000 To Dec. 31, 2007
MPEG LA LLC	U.S.A.	Licensing of patent rights on DVD players	From Jan. 1, 2002 until the termination of patent period
Microsoft Corporation	U.S.A.	Licensing of usage rights to basic software.	From Jul. 1, 2003 To Dec. 31, 2012

Capital Investment

(in millions of JPY)

	FY2010	FY2009	FY2008
Group	4,882	4,378	10,160
Audio System Division	2,011	2,084	5,323
Information/Communication System Division	2,864	2,287	4,830

Capital Investments in FY2010
Audio Systems Division
-The Company invested 448 million JPY for tangible fixed assets, mainly dies; and 203 million JPY to develop software.
-The Company invested 570 million yen in installing additional equipment to manufacture audio systems at Taicang Alpine Electronics Co. Ltd. in China.

Information/Communication Systems Division
-For the purpose of developing new products and increasing production efficiency, the Company invested 1,051 million yen in acquiring tangible, fixed assets; and 476 million yen in developing software.
-The Company invested 155 million yen in installing additional equipment to manufacture information/communication systems at Alpine Electronics Manufacturing of Europe Ltd.

New Facilities

Name	Location	Activities/Products	Planned investment amount (million JPY)	Starting date	Planned completion
Alpine Electronics, Inc.	Iwaki city, Fukushima Pref.	Machinery/devices	319	Apr. 2011	Mar. 2012
		Industrial tools, equipment, and dies	2,480
Dalian Alpine Electronics Co. Ltd.	Dalian, China	Machinery/devices	323	Apr. 2011	Mar. 2012
Alcom Electronicos de Mexico, S.A. de C.V.	Reynosa, Mexico	Machinery/devices	291	Apr. 2011	Mar. 2012