Annual Report 1998 - Omron

Social Business
22.6%
As of April 1997, our Electronic Fund Transfer Systems (EFTS)
Division and Public Information and Transfer Systems (PITS)
Division were merged into a single division, the Social Business
Division, to combine resources in developing new integrated markets.
Social Business Division sales declined in fiscal 1998, reflecting
weak sales of financial systems.
Since the start of Japan’s
Big Bang financial regulations,
we have developed
foreign currency
exchange machines for
the domestic market.
SALES
(Billion ¥)
120
127
126
145
138
In the financial services market, domestic sales of automated teller machines (ATMs) to
banks sank under diminished capital investment from the troubled banking industry.
However, demand for ATMs remained strong in Japan’s consumer finance industry as companies
expanded their ATM and unstaffed automated loan application machine networks to
maintain their customer bases as competition heightened under deregulation in this currently
profitable market. Overseas, the upheaval in the financial industry in South Korea, which
has been an important market, resulted in lower overseas sales of ATMs.
Among market trends, demand for low-cost and open systems products is growing in line
with the trend of purchasing system solutions rather than packaged systems. The introduction
of a revised Foreign Exchange and Foreign Trade Law allowing companies other than
banks to enter the foreign exchange market has prompted a rush in orders for foreign currency
exchange machines as well as for centralized surveillance and other systems. We
have introduced an open systems version of our IX-ATM and new foreign currency exchange
machines to meet the broadened demand in the market.
We also introduced a CX-ATM model that accepts integrated circuit (IC) cards to the South
Korean market, where such cards have recently been standardized. In Taiwan, demand for
an automatic deposit function for paper currency at ATMs led us to launch a new model of
our AP-ATM, a low-cost machine designed for Asian markets, that features this function.
In the retail systems market, capital investment declined because volume discount retailers
and gas stations reduced their capital investment due to the fierce price competition in
these markets. However, demand for credit authorization terminals (CATs) from consumer
credit companies remained high, as these companies further expanded their operations.
Overseas, orders for retail systems from major customers in Europe were favorable. The
popularity of PC point-of-sale (POS) systems continued to grow in overseas markets, and
we introduced the PC-POS Compact, including the RS6500 series, to meet this demand.
Current demand for retail systems in the domestic market centers on achieving low-cost
operations and minimizing functions. In response, we have developed purchase coupon
vending machines, equipment, and systems with pared-down functions.
Major strategies for expanding and improving the content of our EFTSs sales in the current
fiscal year include full-scale efforts to secure new, major clients. We are also looking at
developing new integrated markets, particularly in the area of overlap between the financial
and retail sectors. To improve our cost structure, we are cutting fixed costs while expanding
production and improving the operating efficiency of our business functions, such as sales,
production, development, and maintenance. To achieve the most effective use of resources
inside and outside the Company, we are considering appropriate alliances and the outsourcing
of certain business functions.
In the public transportation systems market, the construction of a new subway line in the
Kansai area and expansion of the number of stored fare (SF) systems, which allow passengers
to travel on different companies’ lines with the same card, boosted sales of automated
passenger gates (PGs) and ticket vending machines.
’94 ’95 ’96 ’97 ’98
10