I’ve been reading Yamaha’s 2018 Annual Report to investors and would like to pass along these observations.
Yamaha, the business, is in transition. It reorganized its by-product line structure into a function-specific structure: production, sales, marketing, R&D, design. These functions have centralized management and are not distributed into product line units. Hopefully, this change and Yamaha’s Innovation Center will break down stove-pipes between arrangers and synths, for example.
Worldwide, Yamaha has many factories: Japan (3 factories), Indonesia (5), China (4), and Malaysia (1). Yamaha will be adding two new factories in 2019: Chennai India (January) and Jakarta Indonesia (July). The Chennai factory will produce products for the local Indian market. The new Jakarta factory will produce digital musical instruments (DMI) as well as pianos.
Yamaha have been actively revising selling prices. This explains why we have seen price fluctuations in certain regional markets. One important goal of note to customers, Yamaha are working to establish appropriate pricing at time of product launch. Personally, I throw out Reface as an example, where everyone said “Are they nuts?” after seeing the initial high street price.
Yamaha list their primary competitors:
- Pianos: Steinway & Sons (Germany and the U.S.); Guangzhou Pearl River Piano Group Co., Ltd. (China); Kawai Musical Instruments Manufacturing Co., Ltd. (Japan)
- Digital music instruments: Casio Computer Co., Ltd., Roland Corporation, and Kawai Musical Instruments Manufacturing (Japan)
- Wind instruments: Conn-Selmer, Inc (the U.S.); Buffet Crampon (France); Jupiter Band Instruments, Inc. (Taiwan)
- String and percussion instruments: Fender Musical Instruments Corporation, Gibson Brands, Inc., C.F. Martin & Co., and Taylor Guitars (the U.S.
Gearheads will be surprised to see who’s missing. Korg? Nord?
In terms of R&D, Yamaha have a central Technology Unit responsible for advanced technology research and intellectual property (IP) management. The Technology Unit spins results into the technology development departments of each business field such as musical instruments, audio products, etc.
Every Yamaha annual report highlights a few technological stars. This year, it’s the Venova wind instrument (which uses branched pipe theory first seen in the VL1 virtual acoustic sound source), the Rivage PM10 digital mixing system and the SST-102 desktop ultrasound scanner.
The Yamaha Innovation Center was completed in June 2018. This new building centralizes the R&D staff, who were scattered over multiple locations. Surely, Yamaha is looking for new synergies. The Innovation Center also brings together specialized laboratories (e.g., anechoic chamber), recording studios and reverberation chamber. I’d love to visit!
Periodically, I browse recent patents filed by Yamaha and other technology leaders. Yamaha group has about 4,00 patents in Japan and roughly 4,000 patents in the United States, Europe and China. Patents, trademarks and copyright are important tools in defending its intellectual property. Increasingly, Yamaha have been filing design patents in the USA to cover industrial product design, too.
Speaking of industrial design, the annual report spotlights the NS-5000 bookshelf speaker, Venova, the SX series of grand pianos and Genos™.
I’m a little too fried to dive into the P&L right now. However, I hope these observations are enlightening.
Copyright © 2019 Paul J. Drongowski