IoT Market Expansion and Delays in Collaborative Business Progress

「Revenue from contract development declined due to project delays and lost orders caused by the impact of COVID-19 on the supply chain, while revenue from licence fees also declined because shipments of models equipped with CD playback functions for automotive equipment decreased.」

「Meanwhile, new projects have been lost or cancelled due to customer circumstances, and new development projects and research and development have been cancelled or postponed because of reduced budgets and other factors. Although delays caused by work stoppages related to the COVID-19 pandemic were beginning to be resolved in the second quarter, acquisition of new projects remained generally sluggish.」

「As a result, the high-speed boot products grew as core products, mainly through royalty revenue, while contract development for Connectivity & Security products contracted and monetisation in new business areas was delayed.」

「Revenue from the Connectivity & Security business was ¥224.269 million, down 42.2% year on year, and the segment loss was ¥142.234 million, compared with a loss of ¥73.343 million in the previous fiscal year.」

「For the consolidated fiscal year, results fell substantially short of the initial targets because revenue from security-related products was below expectations due to the termination of the partnership agreement with the developer of Ubiquitous TPM Security and other factors, royalty revenue from a new large-scale project for overseas customers was not realised during the fiscal year due to customer-related factors including shipment delays, and smart energy-related transactions, including the electricity retail business, struggled to grow because switching of electricity contracts associated with electricity retail liberalisation was weaker than expected.」

「The company is conducting sales activities to make up for the shortfall in the first half by launching, among other initiatives, a high-function HEMS gateway device jointly developed with its collaboration partner. However, due also to delays in manufacturing the device, its contribution to revenue for the current fiscal year is expected to be limited.」

「However, demand for switching electricity suppliers associated with electricity retail liberalisation has not expanded across the market as much as expected, and some smart energy-related transactions with companies entering the existing electricity retail business have remained sluggish.」

「However, due to the characteristics of the market, it takes time for products to reach the market after adoption, and a certain amount of time is required before they contribute to revenue.」

「The results fell short of the targets set at the beginning of the fiscal year because the market itself took longer than expected to expand and progress in the partnership business fell short of expectations, among other factors.」