Review of Operations

REVIEW
OF
OPERATIONS
COPIERS
AND
1
OFFICE
EQUIPMENT
RELATED SUPPLIES
Ricoh pioneered and is a global leader in digital copiers.
Digital machines have become integral to customers’ efforts to improve office productivity through networking. Ricoh has drawn on its
digital technologies to build a solid lineup of personal computer-connective and multifunctional models. These efforts have helped the Company
maintain its top position in the Japanese market as companies build digitally networked offices. We have launched many revolutionary networkable products overseas, as a result of which we are now No. 1 in the
United States and Europe in core monochrome digital offerings.
Highlights of the Year
SALES OF COPIERS AND RELATED SUPPLIES
1000
891.0
828.4
800
654.5
600
FISCAL 1998 PERFORMANCE
In fiscal 1998, sales of copiers and related supplies jumped 7.6%, to
¥891.0 billion ($6,750 million). These products constituted 63.5% of net
sales, up 0.5 percentage point. Domestic sales slipped 0.6% owing primarily to the nation’s prolonged recession.
The story was different overseas, with sales rising 18.5%. This doubledigit gain reflected the high popularity of new additions to the Aficio lineup and the expansion of our
sales channels abroad.
New Aficio 200, 400, and 500 series machines
sold particularly well. The Aficio 200 and 250 deliver 20 and 25 copies per minute, respectively.
They are favored for their central output trays,
which make them incomparably compact. Just as
important, they offer optional faxing and PC printing modules.
RICOH TOP GLOBALLY IN
The Aficio 400, which outputs 40 copies per
DIGITAL COPIERS
minute, sold strongly because it delivers nine powIndustry surveys have found that Ricoh was the No. 1 seller
erful digital capabilities. For example, it can run
of digital copiers in Europe (source: InfoSource) and the
multiple copy jobs straight from its massive memoUnited States (source: Dataquest) in 1997. We captured a
55.8% market share in Europe and another 39.4% in the
ry after a single scan. It electronically sorts comUnited States. These results compared with 27.6% and
plete sets of documents, eliminating the need for
48.5%, respectively, for the previous year. Ricoh has led in
Japan since it pioneered digital copiers there in the 1980s.
several sorter bins, and has a 256-level grayscale
Pictured is the Gotemba Plant in Shizuoka, the Comphoto mode. The Aficio 401, a sister machine,
582.9
544.8
400
200
pany’s main facility for the production of digital copiers.
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(Billions of Yen)
1998
JUDY NAUJOKS of Access Print notes that: “Our
Ricoh color copies are easy to sell because
they’re so good. Reliability and quality are
important to us. Ricoh has them both.” Judy’s
company is a leading print shop in Emeryville,
California.
Linked to an EFI Fiery XJ Plus controller, the Aficio
Color 5206 outputs up to six color copies per minute,
including from computer data, making it simple to
create posters and publications.
doubles as a high-resolution printer, which is a key additional attraction
for networked offices.
The 50-copy-per-minute Aficio 500 is Ricoh’s flagship monochrome
digital model, and has enjoyed strong demand as an office productivity
enhancer.
Ricoh continued to expand its color range overseas during the year.
The prime introductions were the Aficio Color 2000 series, with three
copies per minute, and the Aficio Color 5000 series, which outputs six
copies per minute. Both these models are available in their basic configurations or connected with an EFI Fiery controller for PC printer users.
Our digital copiers went from strength to strength in Japan, although
sales of analog models were down slightly. We successfully expanded the
digital IMAGIO series during the term. The IMAGIO MF-P series sold
especially well for its PC networking. Like its
overseas Aficio-branded counterpart, the IMAGIO MF250 won a solid following because of
its ultracompact design.
We released more models in the second
half of fiscal 1998. Among them was the IMAGIO MF6550, Ricoh’s fastest digital copier,
with a maximum output of 65 copies per
minute. We are therefore confident that we can
broaden our customer base for digital machines.
DAVID DEGRAZIA says: “I really enjoy the efficiency the Aficio 401 offers by allowing me
to perform all my printing and copying needs
right from the desktop.” David is a Corporate
Communications coordinator at VIVUS, Inc.
Headquartered in Mountain View, California,
VIVUS is a leading developer of advanced therapeutic systems for the treatment of impotence.
The networkable Aficio 401 is a 40-copy-per-minute
machine, with top image quality, quiet operation, and
memory-based electronic sorting.
FRITZ BLANK OF Motorenwerke Mannheim AG
in Germany, says: “Our machine provides top
quality and quiet operation
for each of the 150,000
copies we make every month
on it, and we get quick and
reliable service.” His company is a leading manufacturer of
tractor motors and ship engines.
The FT8982 delivers 82 copies per minute and has
an auto reverse document feeder, a 20-bin sorter/stapler, and simple, touch-screen operation.
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REVIEW
OF
OPERATIONS
PETER BRUNOW of Berlin-based Deutsche Bahn,
Germany’s national railroad, says: “The FT7650
matches our standards for reliability and quality, which is
important for our technological progress, and gives us
very favorable life-cycle
costs.”
The FT7650 is very popular among high-volume
users for its user-friendly operation and many highproductivity features, such as a sorter/stapler.
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Our domestic color range also grew in fiscal 1998. We brought out the
PRETER 610/660, which boasts superb resolution and a host of editing
functions. Also introduced was the PRETER 310/360/365, a highly affordable series employing Ricoh-developed technologies for enhanced
image quality.
With analog machines, we are focusing on environmental friendly
products. In fiscal 1998, we commercialized one important model in this
regard. It is the SPIRIO 5000RM, which is remanufactured using 60% recycled parts by weight. It underscores our commitment to environmental
protection.
Ricoh also makes a comprehensive range of wide-format copiers and
stencil duplicators, many of which have sold well for their digital and PCconnective capabilities.
LOOKING AHEAD
We expect the trend toward digital networked models to
continue as customers maintain their focus on office productivity and creativity. Accordingly, we will bring out additional offerings that match more specific requirements.
This is especially true in Japan, where digital copiers are
now so widely used.
Overseas, we will continue building our identity as a
major digital equipment manufacturer by leveraging our Aficio brand. We
will draw on increased the capacity of our digital copier plants in the
United States and Europe. We have also started making digital products
in China to complement our operations in these areas and in Japan.
JOHN DE MAIO, president of First California
Mortgage, selected the FT7670.
The FT7670 outputs up to 70 copies per minute.
This user-friendly model incorporates a sorter/stapler
and has many other convenient capabilities.
Spain’s Ministry of Education has installed many
FT5832s in its offices.
The FT5832 outputs up to 32 copies per minute and
incorporates a host of environmentally friendly features.
BTicino uses the Aficio FX10 at its headquarters
in Varese, Italy, and also has an Aficio 250.
BTicino manufactures electrical sets and
equipment and has more than 1,000 employees.
The multifunctional Aficio FX10 machine incorporates copier, faxing, scanning, printing, and PC
fax/modem functions.
COMMUNICATIONS
AND INFORMATION
SYSTEMS
This business category includes mainline fax machines, as well as printers, scanners, software, and other information peripherals.
The main shift in this business category has been toward offering customer solutions. We provide products and services to help companies
make the right choices in complex networking and information technology investments.
Our networkable scanners and printers incorporate in-house-developed digital and image processing technologies. In software, we use our
systems integration capabilities to customize packages.
SALES OF COMMUNICATIONS AND INFORMATION
SYSTEMS
350
308.3
280 269.3
283.2
322.4
287.4
FISCAL 1998 PERFORMANCE
Sales of communications and information systems rose 4.6%, to ¥322.4
billion ($2,443 million). This represented 23.0% of net sales, from 23.4%
a year earlier.
Madrid City Council relies on the FAX1700L
fax machine.
The FAX1700L is a desktop plain-paper laser model that can scan documents into transmission memmory while receiving. It delivers high productivity
and excellent image reproduction.
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(Billions of Yen)
1998
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REVIEW
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JEAN-LOUIS HÉLIN says: “Ricoh France has
equipped the 577 deputies of France’s Assemblée
Nationale with the FAX1700LF.” Jean-Louis
works for the French National Assembly in Paris,
which uses hundreds of Ricoh machines.
The FAX1700LF is a highly efficient desktop plainpaper laser fax machine that offers fast scanning and
transmission.
COMMUNICATIONS SYSTEMS
Our domestic facsimile operations were generally
healthy during the term because of computer networking and other value-added capabilities.
Overseas, the Aficio FX10 was a stellar performer because of its compact deskside design and
multifunctionality. We commanded positive attention in the marketplace for our new line of mostly
PC-connective plain-paper fax machines. These
models included the FAX3700L, a G3 model designed for regular users, and the FAX4700L, which
is upgradeable to G4 transmission. Another top performer was the FAX1750, a G3 offering designed
for deskside use in small offices.
Domestically, we achieved a powerful market impact with high-value-added, multifunctional machines. Principal among these were the RIFAX
HD5200 Super and RIFAX SL3200 Super, which
use the Super G3 protocol to transmit an A4 page
over regular phone lines in just three seconds.
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Highlights of the Year
Sales in this category were solid in Japan, but were even better elsewhere in Asia, primarily because of the popularity of PC-connective models. Sales of information systems were also good because of our packaged,
systems integration approach to computers, printers, software, and services.
RICOH MACHINE SCORES
ENVIRONMENTAL AWARD
Our RIFAX BL110 Shataro2 (MV310E in the United
States) digital fax-copier reduces power consumption by
95% in fax standby mode, an achievement that earned it the
Presidential Prize at the 1998 Energy Saving Excellent
Awards, which are sponsored by the Japan Machinery Federation.
Holding the award certificate is Makoto Hashimoto, a
Ricoh managing director and general manager of the Image
Processing Products Division.
Featured with the IPSiO Color 2000 is Arisa
Mizuki, a highly popular actress and pop singer in
Japan. Ricoh chose Arisa as the promotional personality for its dynamic new IPSiO line of color and
monochrome laser and inkjet printers. The IPSiO
Color 2000 color laser printer has become an instant
success for its compactness, speed, and affordability.
INFORMATION SYSTEMS
This business area encompasses printers and scanners in Japan and overseas. Specific domestic offerings are personal computers, software and services, and Japanese-language word processors.
In Japan, our printer sales focused on mid- and high-volume models.
These sold steadily because of their processing speed and multiprotocol
compatibility in networked environments. Demand was particularly good for
the PC LASER NX-110, which outputs 13 pages per minute. Other strong
performers in the PC LASER series were the NX-510, which delivers 20
pages per minute for workgroups in multiplatform offices, and the NX-1000,
a 38-page-per-minute workhorse that handles up to A3-size paper.
Personal computer sales were up significantly in line with generally
high demand in Japan. While constituting a small percentage of sales, PCs
are important because they form part of our systems integration business.
Ricoh is well positioned to offer systems integration services because of its
depth of peripherals and software based on proprietary digital and networking technologies. One example is the very popular Ricoh Solution
Group Office. We based this on Lotus Notes groupware. It integrates
processing so users can easily share, store, retrieve, and transmit documents. Our optical character recognition software and Japanese TrueType
fonts for Windows also contributed significantly to sales in fiscal 1998.
Ricoh plans to create an even larger range of innovative hardware and
software in the next few years in keeping with its position as a systems integrator and its commitment to Image Communication.
Ricoh took a final step in its strategy to become the
global leader in output equipment when it unveiled
its all-new line of laser and inkjet printers to an enthusiastic reception in Tokyo in May 1998.
LOOKING AHEAD
We have already taken significant steps to broaden our product line. Early
in fiscal 1999, we introduced several networkable printers in Japan under
the new brand name of IPSiO. New machines included the IPSiO NX700
and NX600 laser printers, which despite their compact appearance can
output up to 20 and 16 pages per minute, respectively, and handle up to
A3-size paper. We introduced the IPSiO NX70, an A4 model for small
and home offices, and the IPSiO Color 2000, our first color laser printer.
Just as important, we commercialized the IPSiO JET 300 color inkjet machine and several other printers.
These new printer products complement our copier and fax machine
operations and place us well to become No. 1 in the global market for
output equipment.
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REVIEW
OF
2
OPERATIONS
This area encompasses photographic equipment, electronic devices,
OTHER
BUSINESSES
CD-Recordable (CD-R) and CD-ReWritable (CD-RW) drives
and media, and unit modules for personal computer
parts.
Our operations also extend to educational and
measuring equipment, as well as leasing, finance, and
logistics services that support Ricoh’s overall operations.
SALES OF OTHER BUSINESSES
200
171.2
160 154.2
179.4
189.9
154.2
FISCAL 1998 PERFORMANCE
Fiscal 1998 sales of other businesses climbed 5.9%, to ¥189.9 billion
($1,438 million), and accounted for 13.5% of net sales, from 13.6% in
fiscal 1997.
PHOTOGRAPHIC EQUIPMENT
These products sold very well in the Americas and Asia, and demand in
The GR1 won the Best Camera of the Year 19971998 from the Technical Image Press Association for
Japan was excellent for digital models.
its superb body design and exposure control.
In digital cameras, which we pioneered as personal computer input devices, we enjoyed tremendous popularity with the affordable DC-3
(RDC-300 overseas), which employs a 350,000pixel charge-coupled device, and the DC-3Z
(RDC-300Z), which incorporates a 3X zoom
lens. Both these models won strong support
among heavy computer users and the general
public.
We continued to move up-market in 35mm
compact cameras. These products again did well
in Japan and abroad. The GR1 was again a topseller, and scored a prestigious camera award in
VOICE-RECOGNITION LSI
Europe for its 25mm-thick body and compact,
MADE ASIC OF THE YEAR
high-performance lens.
Highlights of the Year
The new RDC-4300 incorporates a powerful 3X
zoom lens and a resolution of 1.32 million pixels, and
is light, compact, and incredibly simple to use.
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(Billions of Yen)
1998
ELECTRONIC DEVICES
The Company develops and manufactures electronic devices for its image-processing products.
We make application-specific integrated circuits
(ASICs) and application-specific standard products (ASSPs). Our ASICs are principally for
In January 1998, Ricoh’s RL5S840 voice-recognition large-scale
integrated circuit captured the ASIC of the Year Award from
the Semiconductor Industries Newspaper of Japan. The prize was
for an advanced function that allows the chip to ignore unneeded words.
Pictured at the ceremony are (from right) Tamio Murano,
general manager of the No. 1 Parts Department of the Electronic Devices Division; Masaru Kuroda, assistant manager of
the No. 33 Design Office in that department; and Seigo Yasuda,
manager of the No. 33 Design Office.
Ricoh helped standardize CD-RW specifications and
was the first to start mass-production of CD-RW media. Our testing facilities for such media are considered among the best in the world.
proprietary central processing units, digital signal processor cores, and
large-scale integrated circuits for telecommunications. Our ASSP lineup
includes a CD-R/CD-RW controller and PC card controllers for notebook computers. We also supply general-purpose large-scale integrated
circuits, notably power management chips and real-time clocks.
CD BUSINESS
We entered this area to provide storage for high-volume multimedia
computer data. Complementing our CD-R drives and discs are CD-RW
products, for which we helped form international technical standards. We
are a top player in these high-growth areas, with a solid market presence
in Japan, Europe, North America, and Asia.
During the year, we introduced the instantly successful MP6200 series
of compact drives. They handle CD-R, CD-RW, and CD-ROM media.
We support our operations with a production network that
encompasses the United States, Europe, and Japan.
Our new MP6200 series of compact CD-R/RW
drives is compatible with CD-RW, CD-R, and CDROM discs. The drives write at double speed and read
out at six times speed. They also incorporate random
access writing software so they can rewrite or erase
data in single file units.
Ricoh is a leading maker of power source integrated
circuits. The Company serves in-house operations and
major telecommunications equipment manufacturers.
LOOKING AHEAD
We expect digital cameras to become widely popular over
the next few years. We are positioning ourselves at the high
end of that market. Our first introduction in that area is the
light and compact RICOH DC-4 (RDC-4300 overseas),
which pushes the envelope of digital camera design with its
3X zoom lens and resolution of 1.32 million pixels.
In fiscal 1999, we will continue to focus our device operations on
ASICs and ASSPs for image processing and information and telecommunications equipment. In addition, we will build on our position as the
world’s only manufacturer of both CD-RW drives and media.
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