Good for the Seller, the Buyer, and the Public
Due to such factors as a rise in the price of crude oil, the corporate price index bulletin for September registered a 1.8% increase. The corporate price index indicates the price fluctuations of materials and intermediate goods. For the material and intermediate- good industries, an increase is a good sign, because if necessary they can pass it on to prices. In this respect, they differ from consumer-product industries, which cannot pass any increase on to the prices of products even though a negative impact is unavoidable, because the price of crude oil, which is a raw material, is actually rising. Meanwhile, the price of finished products in September went down 1.0% year-on-year, which means that the deflationary phenomenon has still not been alleviated.
Consumer-product industries are in a difficult situation, because they cannot transfer the increased costs to prices. The cost of materials and intermediate goods is going up, but the prices of products made from these items are coming down. This means that companies cannot make profits. Eventually, after doing the rounds, the problem is going to rebound on the material industries, and industry as a whole will become fatigued.
This fall companies have been launching new products seriously, and several of them offer definitive proposals for the next generation. I can only wonder at the pioneering leadership and depth of the audiovisual industry.
The hard-disk video camera put on sale by Victor does not require the conventional installation of tapes, and so on. This is evidence of the fact that video cameras including ones that use such recording media as memory cards are also going to achieve further evolution, including picture quality. Given these circumstances, it can be said that video cameras are going to enter a completely new age in 2005.
Front-surround systems are blossoming, too. At long last the year-end sales battle is going to see the flourishing of home theater, and retail stores that can offer added-value sales will be able to make a profit. In particular, front-surround equipment is highly individualistic; it could well be the harbinger of a home-theater boom.
In addition, there is a return to pure audio. The baby-boom generation is moving. This generation has a bit of leeway. It has a strong interest in component-type home theater, and at the same time it is returning to pure audio. Against this background, Denon has been putting a lot of effort into the pure audio market, activating its specialty stores and introducing high-end models. The activation of home-theater products and pure audio are both urgent and timely, and I am greatly looking forward to the results.
And there are digital audio players. The personal-computer maker Apple started the trend with the iPod, and other companies have been jumping on the bandwagon and launching their own products in this field, creating a very lively market indeed. Expectations are running high that these products will create a peak in the Net and digital age. These products enable the hard-disk recording and enjoyment of music. Undoubtedly they are going to achieve rapid growth and become a powerful driving force to propel portable audio into an entirely new era.
I could go on, but the important point to note is that before you know it these wonderful products that are going to lead the next generation will be available at quite cheap prices. Companies could be making profits, but they are throwing them away. It is of course important to give consumers a sense of affordability, but we must not let the makers, who have difficulty passing cost increases on to prices, become exhausted, either.
I hope that we can claim victory in the year-end sales battle with a principle of "good for the seller, good for the buyer, and good for the public."