33/33 Questioner(3)


Questioner 3: Thank you for the presentation. My first question is about HCB. Thank you for the discussion of the HCB growth strategy today. Several months ago, I understand that Apple Watch received approval as a medical device from the Ministry of Health, Labor and Welfare in Japan. From a non-expert standpoint you could argue that if the Apple Watch has been approved as a medical device by MoHLW, the FDA and regulatory authorities in other countries, consumers may find it easier to buy an Apple Watch than buying OMRON’s wearable BPM. What do you think? On the other hand, from an expert’s point of view, you could take the view that an individual that is truly ill might have a preference for a recognized brand with a history and track record like OMRON. Can you talk about the strengths of the wearable BPM? Also, you talked about expanding beyond hardware to expand and enhance software offerings and platforms through collaborations with partners such as Luscii and other overseas companies. Hypothetically speaking, if Apple were to approach OMRON saying that medical institutions and physicians do not rate or use the apps incorporated in the Apple Watch and asked to use OMRON’s software or platforms in exchange for a fee, would you consider a partnership? It does not have to be Apple: there are many high prestige watch makers with digital offerings. Would OMRON consider selling its software or access to its platform on a standalone basis? A. (Takeda) Given my role as Head of the Global Strategy HQ, I will take this question. First, the Apple Watch is enabled to measure ECG. Our wearable is a BPM, so the devices are measuring different vital signs. In addition, through the alliance with AliveCor, we have added ECG measurement to our BPM, so while OMRON can measure both blood pressure and ECG, Apple Watch only measures ECG. This is a clear difference. There is one more point I would like to make. While Apple was able to secure approval as a medical device, if you read the approval document, you will see that the ministry does not recommend that physicians use the Apple data to make a definitive diagnosis. This means that the Apple data cannot be used by physicians for diagnostic purposes at this time. The OMRON wearable BPM has been approved as a medical device and physicians are able to use the ECG data generated by the mobile ECG device in making a definitive diagnosis. Therefore, there is currently a substantial difference in how medical practitioners are able to use the collected data, which we view as a significant advantage. Your second question is a good question. OMRON’s key focus is Going for Zero. Our mission under the Zero Events initiative is to reduce the number of fatalities or serious side effects from cardiovascular and neurovascular events to zero and to contribute to a reduction in government medical spending around the world. From this perspective, we would need to see that sharing software for use in other devices, such as our systems or algorithms, as a business would be effective in helping achieve these aims. We would also need to ensure that we would be appropriately rewarded for the added value generated. If this is possible, then I would certainly be willing to actively consider it. Does this answer your question? A. Thank you. That is very helpful. My second question is about SSB. At the last results briefing, you indicated you planned to launch a service that would take on the functions of railway station staff. I think this is very promising and if you are able to incorporate OMRON’s facial recognition technology, I can see it tying into systems linked to the government’s My Number program to enhance individual traceability. However, the earnings of railway companies have been severely challenged. Does this not have an impact on the speed with which you can launch these services or the potential scale of this business? Given the railway companies’ weak earnings and the likelihood that any recovery will take time, should we expect that SSB’s earnings are likely to be lackluster as well? Or, do you think that these new services will start to take off dramatically in the next few years? Please talk about sales prospects for these services. A. (Nitto) I cannot provide you with specific figures but we continue to discuss this service with multiple railway companies and I can tell you that the response has been very positive. As you know, this fiscal year is very challenging for the railway companies, making it tough for them to invest. The railway companies are very keen on investments that generate significantly better efficiencies and they view such investments as necessary to improving earnings. With regard to station services, the railway companies are much more interested in investments that will substantially improve efficiency over new investments. To date, the railway companies have invested directly to improve service levels, but they are increasingly open to different approaches now. There is much more of a focus now on leveraging services as opposed to investing in equipment. This will be the key for an improvement in the SSB business; we are focusing our efforts in this area now. At this stage, I cannot comment on when you might see a step-up in revenues from these types of services but I can say that we are headed in this direction and we are making progress. Q. Thank you.