Fuji Xerox Co., Ltd., a consolidated subsidiary, engages in Document Solutions operations comprising copying machines, printers, fax machines, and consumables for document service applications in offices.

Consolidated revenue in this segment grew 2.1%, to ¥950.4 billion, owing to such factors as a rise in the domestic sales of the DocuCentre Colour series of digital multifunction copying machines, the start of full-scale exports of that series to the Asia-Oceana region as well as to North America and Europe, and the expansion of laser printer sales due to the acquisition of the laser printer operations of NEC Corp. and Fujitsu Ltd.

Photocopiers

In the domestic copier market, the continued rapid shift to colour copying machines generated strong demand.

Fuji Xerox strengthened its DocuCentre Colour 400 CP/320 CP digital colour multifunction machine lineup with the launch of the of the DocuCentre Colour 240 CP, thereby maintaining its top share of the digital colour multifunction machine market in unit volume terms. Fuji Xerox also proceeded with its strategy of providing high-added-value services using the network printing capabilities of digital colour multifunction machines installed at the nationwide convenience stores of Seven-Eleven Japan Co., Ltd. It became the first in the industry to enable customers to securely obtain high-quality printout of previously recorded and registered electronic documents.

Overseas sales surged considerably, reflecting the launch of DocuCentre Colour series products in the Asia-Oceania region, North America, and Europe. A particularly large rise in sales volume was achieve in China, due to such factors as the local launch of newly developed entry-level digital copiers at affordable prices.

Information-Related Equipment

Fuji Xerox recorded strong sales of its compact and affordably priced DocuPrint 360/260 A3-capable laser printers and strengthened its laser printer lineup with the launch of the DocuPrint C3530, which incorporates a microtandem laser engine that enables 35-page-per-minute, high-speed printing in both colour and monochrome modes. An additional contribution to sales was made by the full-scale commencement of laser printer operations obtained from NEC in the previous fiscal year. The acquisition of Fujitsu's printer systems operations has enabled Fuji Xerox to add super-high-speed continuous sheet printers to its product lineup for the first time, enabling it to offer a diverse selection of printer products ranging from low-speed to super-high-speed models.

In product development achievements, Fuji Xerox's DocuPrint 181/211 laser printers were awarded the Natural Resources and Energy Agency Director-General Prize within the Grand Energy Conservation Prize program of the Energy Conservation Center, Japan, in recognition of those products' low electric power consumption and recycling-friendly designs. In addition, because the new image-fixing method of the DocuCentre Colour 400 CP/320 CP digital colour multifunction machine series has enabled both reduced warm-up times and high productivity, the series was awarded the Natural Resources and Energy Agency Director-General Prize within the Superior Energy-Saving.

Turning to new business fields, Fuji Xerox began offering an array of "beat" IT services for medium-sized and small businesses that provide for the creation, maintenance, and operation of network environments. Having pioneered the development of the vertical cavity surface emitting laser (VCSEL), which is capable of transmitting more than 10 gigabits of data per second, Fuji Xerox has positioned itself to establish a new base of business in the field of leading-edge optical communications technologies.

Notes:
Because the Document Solutions segment was established in the fiscal year ended March 31, 2002, only the results for the years ended March 31, 2003 and 2002, are given here.

Outlook

Based on its "Open Office Frontier" business vision, Fuji Xerox is progressively transforming its core business of copier operations into an office services business that provides customers with diverse document management support services. In this way, the company is seeking to create new value in line with customer needs. To augment its global competitive capabilities, Fuji Xerox is strengthening its development and manufacturing bases and stepping up its cost-reduction programs. At the same time it is working to expand its operations by proactively investing management resources in the strategic growth market of China. Fuji Xerox's management approach emphasises hands-on management techniques, pragmatism, and tangible results. Based on this, Fuji Xerox is endeavouring to rigorously maintain consistently high-quality standards that inspire customer confidence and promote the company's continued dynamic development.