tion in March 2002, under which we will develop third-generation (3G) cellular phones. Joint devel- opment work started in April 2002. Our immediate goal is to launch a series of cutting-edge products on the Japanese market that will maintain our high-profit structure. In addition, we will cultivate new markets by releasing i-mode terminals in Europe and CDMA terminals in China. In the North American market, we will bolster our product lineup and launch aggressive operations in our alliance with Audiovox Communications Cor- poration, to further increase CDMA market share and profits. Established in April 2001, the Mobile Com- munications Company has recorded solid results in sales of cellular phones for the domestic mar- ket. That was, however, undercut by the slowdown in the North American market. In the final result, shipments in fiscal 2001 declined 29% against the previous fiscal year, to 6.35 million units, while sales fell to ¥192.0 billion ($US 1,444 million), down 6%. Our eye is firmly fixed on the future and the unfolding promise of cellular communications. With this in mind, we entered into a technical partner- ship agreement with Mitsubishi Electric Corpora- The future of cellular phones: The J-T07 (l.) and TT21 (r.) both have a CCD camera, the A3013T (c.) supports GPS. All three employ a high-resolution low temperature polysilicon TFT LCD. Through provision of information services based on mobile and Internet communications, the iValue Creation Company is making progress in the three areas of web services for portal sites, content production and distribution, and ASP services. Drawing on all we have learned in the last two years, we will enhance existing services and expand our service competitiveness, and extend our business to reach clearly defined business sectors. Focusing on strategies relating to the mobile broadband Internet, an area promising rapid growth, we will strive to establish a network busi- ness that satisfies customer requirements in terms of quality, price and performance. iVALUE CREATION COMPANY The iValue Creation Company is responsible for developing new information and content services, primarily for delivery via the Internet. Its most popu- lar portal, with over 500,000 cellular phone users subscribing for the pay service, is “Ekimae Tanken Club”, which provides information on entertainment and shopping around Japan’s railroad stations. The company’s other ventures include offering naviga- tion services for owners of cellular phones equipped with a global positioning system (GPS) and operation of “Nippon Daihyo.com,” the offi- cial Web site of the Japan Football Association. iValue Creation also supports the business mar- ket as an Application Service Provider (ASP), in- cluding information provision services and software licensing services for overseas network service providers, especially in Asia. In October 2001, Business Travel Japan Inc., a wholly-owned Toshiba subsidiary, started full-scale operation, offering system solutions for small- and medium-sized travel agents in the business travel market. 25 iVALUE CREATION COMPANY President TSUTOMU KAWADA