Alpine Electronics, Inc. Business Report FY ended Mar. 2016
Financial Overview |
(in millions of JPY) |
| FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | Rate of Change (%) | Factors | |
| Overall | ||||
| Sales | 273,056 | 294,560 | (7.3) | -Business results showed the difficult economic situation, with sales lower due to changes in recent new-auto sales in major markets and foreign currency fluctuations that occurred in the second half of the fiscal year that ended in 2016. |
| Operating income | 5,434 | 11,523 | (52.8) | -Income fell because sales were lower and the product mix became less appealing. |
| Ordinary income | 6,170 | 15,000 | (58.9) | - |
| Profit for the year attributable to owners of the parent | 10,698 | 12,704 | (15.8) | - |
| Audio systems division | ||||
| Sales | 52,824 | 62,920 | (16.0) | -Sales of factory-installed products to major OEMs fell significantly. |
| Operating income | 1,462 | 2,734 | (46.5) | - |
| Information/communication systems division | ||||
| Sales | 220,232 | 231,640 | (4.9) | -Sales fell because OEMs in North America and China switched some of their models. |
| Operating income | 8,170 | 13,465 | (39.3) | - |
Release of “CarPlay” Display Audio System Cancelled
-The Company will pass on the introduction of its display audio system that supports the Apple CarPlay in Japan for the fiscal year ending in March 2016. The system was released for sale in the U.S. and Europe in the fall of 2014. The Company had planned its launch in Japan, anticipating the growth of the display audio market. However, The Company postponed the launch in consideration of a slow market growth and an absence of growth factors at present. For the time being, Alpine will focus on sales promotion of the existing products such as in-vehicle navigation and audio systems and rearview monitors in the Japanese aftermarket. The Company recently launched its first teaser advertisement for the Big X Premium car navigation systems with a large LCD monitor. (From an article in the Nikkan Jidosha Shimbun on March 7, 2015)
Awards
| OEM | Awards | Details |
| GM | 2015 Supplier of The Year | -Second consecutive year to win the award -GM gave high recognition to the Company’s exceptional efforts in proposing initiatives to reach solutions |
| Honda Access | 2016 Special Appreciation Award, Product Development Award | -Honda Access gave high recognition to the Company’s efforts in developing a low-cost camera function |
| FCA APAC社 | Innovative Supplier of the Year Excellence in Quality Award | -FCA gave high recognition to the Company’s exceptional efforts in developing high-quality audio equipment |
Outlook for FY ending Mar. 31, 2017 |
(in millions of JPY) |
| FY ending Mar. 31, 2017 (Forecast) |
FY ending Mar. 31, 2016 (Actual) |
Rate of Change (%) |
|
| Sales | 255,600 | 273,056 | (6.4) |
| Operating income | 3,900 | 5,434 | (28.2) |
| Ordinary income | 2,700 | 6,170 | (56.2) |
| Profit for the year attributable to owners of the parent | (900) | 10,698 | (108.4) |
Current issues
-Develop products with improved quality and features and provide products and services that further satisfy customer needs.
-Stay aware of important issues from the perspective of management, in strengthening especially the development of non-hardware, i.e., soft products. Make efficient and effective R&D investments, in addition to further developing cutting-edge technology by forming business alliances and investing in venture companies.
-Further strengthen the business alliance with Alps Electric. Focus on integrating devices and automotive equipment, which form the basis of advanced consumer electronics technology and ADAS. Develop and make product presentations on onboard communications systems that will become total solutions to OEMs.
--Develop next-generation products that meet the demand for vehicles that are lighter and more energy efficient.
>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)
R&D Expenditure |
(in millions of JPY) |
| FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | FY ended Mar. 31, 2014 | |
| Group | 19,600 | 18,100 | 19,800 |
| Audio System Division | 2,500 | 3,100 | 2,900 |
| Information / Communication System Division | 17,000 | 15,000 | 16,900 |
Joint Development
Development of Next-generation in-vehicle system with IBM Japan
-The Company announced on July 26 that the Company and IBM Japan Ltd. (IBM) have started development of a next-generation in-vehicle system. Both companies will complete a prototype of the system by the end of 2016 and promote it to automakers. The system under development will incorporate the Company's in-vehicle device and IBM's IoT (Internet of Things) solution for the automobile industry "Watson IoT for automotive" as basic technologies and provide a driving environment that suits the driver's and passengers' preferences by utilizing dynamic information through IBM's cloud computing. The companies will examine specific services provided by the system, including displaying route guidance while learning routes that fit the driver's driving preference and tendency, and suggesting destinations and transit locations by analyzing the driver's social information and taste. The system will be designed on the assumption that it will be simultaneously connected with tens of millions of connected vehicles. (From an article in the Nikkan Jidosha Shimbun on July 27, 2016)
Business Partnership with Airbiquity of the USA
-Airbiquity and the Company jointly developed Alpine Connect, which is a new service that enables individuals to use smart-phone apps such as Yelp, Spotify, iHeartRadio, Glymse, and others, which are extremely popular outside Japan, with the Company’s head unit.
Established Joint Venture in China
-The Company announced that it established Neusoft Reach Automotive Technology (Shanghai) Co., Ltd., a joint venture. The new joint venture is located in Shanghai and develops automotive technology and conducts sales activities. It is capitalized at CNY 384.6 million (JPY 7.4 billion). The Company’s shareholding is CNY 150 million. The shareholding breakdown is as follows: Neusoft Corporation 41%, Alpine Electronics (China) (a subsidiary of Alpine) 39%, and Shenyang FullRich Enterprise Management Center 20%. The Company is advancing R&D and business in the following areas, in line with the growing Chinese economy: core technology on battery pack management and intelligent charging for electric vehicles; high-performance driver assist systems that integrate image recognition and sensors; core technology for autonomous driving; and cloud-platform based telematics.
Product development
11 inch WXGA LCD model
-Development of an 11 inch WXGA LCD, which is the largest size in the world, for the Bix-X Premium car-navigation system used in Japan. It is compatible with the controls that operate rear-vision together with the front/rear seat communication functions; and the interior air freshening unit.
Major Technology Licensing-in Agreement |
(As of Mar. 31, 2016) |
| 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 January 1, 1977, until the patent expires. |
| Toshiba Corporation | Japan | Licensing of patent rights on DVD players |
-From Dec. 31, 2000 to Dec. 31, 2017 |
| Microsoft Corporation | U.S.A. | Licensing of usage rights to basic software |
-From July 1, 2003 to Dec. 31, 2017 |
| Sony Corporation | Japan | Licensing of patent rights on Navigation equipment with audio function | From Jan. 1, 2014 to Dec. 31, 2018 |
Capital Investment |
(in millions of JPY) |
| FY ended Mar. 31, 2016 | FY ended Mar. 31, 2015 | FY ended Mar. 31, 2014 | |
| Group | 7,494 | 7,496 | 8,193 |
| Audio System Division | 1,648 | 1,731 | 2,076 |
| Information /Communication System Division | 5,845 | 5,765 | 6,100 |
Capital Investments in FY ended Mar. 31, 2016
| Audio System Division | (in millions of JPY) |
| FY ended Mar. 31, 2016 | |
| Investment in tangible fixed assets such as dies | 390 |
| Investments in software development | 122 |
| Investments in production facilities | |
| -Alpine Electronics of America, Inc. | 190 |
| -Alcom Electronicos de Mexico, S.A. de C.V. | 104 |
| -Alpine Electronics Manufacturing of Europe, Ltd. | 88 |
| -Alpine Technology Manufacturing (Thailand) Co., Ltd. | 362 |
| -Alpine Electronics (China) Co.,Ltd. | 78 |
| Information /Communication System Division | (in millions of JPY) |
| FY ended Mar. 31, 2016 | |
| Investments in tangible fixed assets that help streamline manufacturing and R&D processes | 1544 |
| Investments in software development | 482 |
| Investments in production facilities | |
| -Alpine Electronics of America, Inc. | 486 |
| -Alcom Electronicos de Mexico, S.A. de C.V. | 320 |
| -Alpine Manufacturing of Europe, Ltd. | 756 |
| -Dalian Alpine Electronics Co., Ltd. | 570 |
| -Alpine Electronics (China) Co.,Ltd. | 248 |
Planned Capital Investments |
(As of Mar. 31, 2016) |
| Name | Location | Activities/Products | Planned investment amount (million JPY) |
Starting date | Planned completion | Outline |
| Alpine Electronics, Inc. | Iwaki city, Fukushima Pref. |
Production, R&D and other facilities | 2,409 | Apr. 2016 | Mar. 2017 | Create new products, increase production, streamline operations |
| Alpine Electronics Manufacturing of Europe, Ltd. |
Biatorbagy, Hungary |
Production facilities | 975 | Apr. 2016 | Mar. 2017 | Create new products, increase production, streamline operations |
| Dalian Alpine Electronics Co. Ltd. | Dalian, China |
Production facilities | 696 | Apr. 2016 | Mar. 2017 | Create new products, increase production, streamline operations |