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Toshiba to Announce Major Steps to Reinforce Audio Visual Businesses

28 September, 2004

Tokyo -- Toshiba Corporation today unveiled a series of steps to enhance its audio-visual (AV) business and to support positioning of the business as a pillar for profit generation by fiscal 2006, one of the central goals of the mid-term business plan that Toshiba announced in April 2004. The measures announced today are designed to strengthen innovative product lines and to promote overall capabilities in four areas: AV product reinforcement; sales, service and support; development and manufacturing; and new business cultivation and promotion.

1. Enhancing Product Strengths
Toshiba's product reinforcement strategies will continue to emphasize the launch of differentiated products that fully utilize the company's core strengths, including video, semiconductor, storage and network technologies. Toshiba is concentrating resources on meeting growing demand for digital AV consumer products and targets expanded sales and market share in this fast growing area

Along with today's announcement, Toshiba also unveiled a series of flagship products and new product line-ups in key areas: LCD TVs, gigabeat® digital audio players, and digital video recorders (DVR) integrating HDD. All will be launched in the Japanese market in November.

Toshiba's new LCD TVs, the "LCD beautiful "face"" series includes 32- and 37-inch models, offer vivid color reproduction and the ability to record high definition video to an external LAN-compliant HDD (LAN HDD). These and other advanced functions are supported by "meta-brain," Toshiba's proprietary digital processing system, based on high level integration of the company's advanced system LSI with digital image processing technologies.

The new gigabeat® digital audio players are available in 10, 20 and 60GB versions and all integrate a 1.8-inch HDD—a technology that Toshiba originated and one where the company continues to enjoy the lion's share of the market. The new gigabeat® players all feature a 2.2-inch QVGA low temperature polysilicon TFT LCD that offers full color display of all operations, including menus, titles, artist and album lists and more.

Toshiba also introduced the "RD-X5," the flagship model of its DVR line-up. Toshiba pioneered and continues to lead the market for DVR integrating an HDD and DVD drives. "RD-X5" draws on Toshiba's advanced expertise and technological assets to the full, and leads the way in introducing recording of copy-once content generated by Content Protection for Recordable Media (CPRM), a standard increasingly used in digital broadcasting. The "RD-X5" offers viewers the ability to save copy-once content to a Toshiba-developed dedicated DVD-R that records in the DVD-VR format.

As these new products are brought to market, Toshiba is already looking to the future and planning the early launch of an SED TV (Surface-conduction Electron-emitter Display) within fiscal year 2005. This advanced flat panel display TV will meet growing interest in digital high definition broadcasts with a next generation display offering excellent resolution and brightness, along with fast video-response performance, high contrast and high gradation levels—and low power consumption: 1/3 of that of plasma display and 2/3 that of LCD TVs. By combining this new display with its advanced system LSI and digital video processing technologies, Toshiba will launch a product that utilizes the potential of the SED panel to the full.

Looking to 2005, Toshiba will launch an HD DVD player and recorder. HD DVD discs can be manufactured with a cycle time of only 3.5 seconds with yield rates as high as 90%. Both cycle time and yield rate can further be improved. One of the biggest advantages of the HD DVD is that it utilizes current DVD manufacturing lines, allowing disc replicators to advance to and promote the next generation DVD business with minimum investment.

2. Reinforcing Sales, Service and Support
Along with products reinforcement, Toshiba will also enhance its sales, service and support in Japan. The company will open "Shop Toshiba (1048)," an online shopping site, on October 1, 2004, to sell TVs, DVRs and gigabeat® digital audio players. This shopping site will be directly linked to "ROOM Toshiba (1048)," formerly an independent customized support site. With this direct connection, customers who purchase Toshiba products through "Shop Toshiba (1048)" and register as a member will receive more information on purchased products at the "ROOM Toshiba (1048)" site.

3. Reinforcing Development and Manufacturing Strength
On October 1, 2004 Toshiba will integrate the development, design and manufacture of flat panel display TVs for the Japanese market at the company's Fukaya Operations-Digital Media Network, in Saitama Prefecture. The integrated manufacturing promoted by this move is expected to accelerate product launches and to enhance production efficiency by some 20%. TV engineers currently at Ome Complex will transfer to Fukaya, where they will work on accelerated product development. Toshiba initially developed digital TVs at Ome Complex, but the company will now accelerate the pace of product development by concentrating engineers at the Fukaya site. Development of technologies common to multiple digital products, such as DVD-related products, will remain at Ome.

4. Cultivate and Promote New Businesses
Toshiba has decided to establish a Strategic Business Development & Promotion Division. to cultivate emerging demand and create new markets. The division will develop products differentiated from those of competitors by fully utilizing core storage and AV technologies, and by cooperating with related business divisions. The new division will also consider alliances to promote marketing, both in Japan and overseas, and promote business and product planning to establish business models for new-concept products. Toshiba will also establish an HD DVD Division to accelerate the HD DVD businesses. This division will plan business and product strategies and hold exhibitions to promote HD DVD. Both divisions will be set up on October 1, 2004.

Information in the press releases, including product prices and specifications, content of services and contact information, is current on the date of the press announcement,but is subject to change without prior notice.

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