2. Competition and other factors could put downward pressure on prices.
Market prices for Epson’s core printers and projectors and for certain electronic devices might continue to decline primarily due to intensified competition and a shift in demand toward lower-priced products.
Epson is striving to improve profitability by reducing production costs by using low-cost designs. At the same time, it is taking measures to fight declining prices by, for example, developing and expanding sales of high-value-added products.
However, there is no assurance that these efforts will succeed, and if Epson is unable to respond effectively to counteract downward prices, its operating results might be adversely affected.
3. Epson’s technologies compete with the technologies of other companies.
Some of the products that Epson sells contain technology that place Epson in competition against other companies. For example:
1) The Micro Piezo*1 technology that Epson uses in its inkjet printers competes with the thermal*2 inkjet technologies of other companies;
2) The 3LCD*3 technology that Epson uses in its projectors competes with other companies’ DLP*4 technologies.
Epson believes the technology it uses in these types of product is superior to the alternative technologies of other companies, but, if consumer opinion with respect to Epson’s technology changes, or if other revolutionary technologies appear on the market and compete with Epson’s technologies, Epson may lose that competitive edge which could adversely affect its operating results.