DIGITAL MEDIA NETWORK COMPANY President ATSUTOSHI NISHIDA “DynaBook G series” por- table PCs offer the most ad- vanced CPU available, a 15- inch SuperView LCD and su- perb stereo sound: a rich feast of high quality audio and vivid visual images. Fiscal 2001 saw the portable PC business weather a severe slump. Domestic shipments fell away by 10% from the previous fiscal year, to 0.9 million units, while overseas shipments tumbled 13%, to 2.35 million units. A sharp downturn in IT spend- The Digital Media Network Company is posi- tioned at the heart of digital convergence. Its mis- sion is as simple as it is essential: to develop inno- vative products that bring advances in wireless, im- aging, storage and other technologies to portable PCs, computer network equipment, PC peripherals and visual products and mobile equipment. A key part of its work is the creation of new products, yet unnamed products, that will change the way we do work and add to the way we enjoy life. Toward achiev- ing this, development of advanced digital products has been concentrated at Ome Operations in subur- ban Tokyo. In November 2001, Ome celebrated the opening of a new “Core Technology Center” and a “Digital Media Development Center.” They bring to- gether more than 3,000 researchers and engineers in an environment designed to encourage cross-fer- tilization of ideas. Although consolidated sales in the Digital Media seg- ment were only 1% lower than in the previous year, at ¥1,468.6 billion (US$ 11,042 million), there was an operating loss of ¥14.9 billion (US$ 112 million). Sales of HDDs, CD-R/RWs, DVD-ROM drives and other PC peripherals all recorded advances, as did sales of visual products, including DVD video play- ers. However, reduced spending on IT combined with intensive price competition to impact on sales of por- table PCs and overall segment results. Digital Media 23 '00 '01 '02 1,469 1,486 1,435 '00 '01 '02 -15 18 46$^{OPERATING INCOME}$ NET SALES (Billions of yen) (Billions of yen) The Digital Media Network Company product line- up embraces portable PCs, computer network equipment, storage devices, such as HDDs and ODDs, and visual instruments and mobile devices. At the concept and design stage, we fully ana- lyze the “voice of customers (VOC)” and use it to provide highly practical and original products and services. Based on differentiated innovative tech- nologies unique to Toshiba, we effectively lever- age our experience with portable PCs to create inspirational products, to propose new home lifestyles and new ways of working in office and mobile environments, and offer wireless system solutions that enrich the daily life of our customers. DIGITAL MEDIA NETWORK COMPANY