1. Creation of New Industry by Digital Convergence By Takashi Kubota, Hitachi, Ltd. 16th of July, 1999

2. Table of Contents 1. Transition of Industries From Past to Future 2. Typical Example of Digital Technology 3. Core Technology and Applications 4. World Electronic equipment Market 5. Acceleration of Industry Development & Conclusions

3. PAST From Past to Present PRESENT PC Calculator OHP Telephone Facsimile Transceiver TV VCR Radio LD Player Stereo Set Audio Cassette Recorder Analog Technology Information Technology Communications Consumer Electronics Analog/Digital Technology

4. From Present to Future Information Technology Communications Consumer Electronics Analog/Digital Technology PRESENTFUTURE Consumer Electronics Information Technology Communications Digital and Related Technology Digital Convergence

5. -Typical Example of Digital Technology- DVD Digital Versatile Disc (1) Size12cm / 8cm (0.6mm two discs bonded) Capacity4.7GB/side/layer (7 times bigger than CD) Max. 17GB/2 sides, 2 layers Movie/studio quality 135min. Data/10 years of a daily newspaper e.g. Financial Times

6. DVD Digital Versatile Disc (2) Objectives Full product compatibility IT & CE application Read only, recordable, rewritable, random access FormatCreated by 17 Companies including IT & CE industries and motion picture industry USA, Europe, Asia and Japan PromotionDVD Forum, 204 companies

7. DVD Creates New Business DVD player li (300MB) n r d d d d Disc camera

8. Emerging DVD Market World DVD Market Forecast (Unit: Millions of U.S. dollars, Data: EIAJ) DVD-RAM DVD-Video DVD-ROM

9. Core Technology Entertainment Computers & Peripheral Core Technology Communications Electronic program guide Graphical user I/F World Wide Web Internet protocol TCP/IP HTML Electronic commerce Encryption & decryption Cryptography & authentication Water mark, data hiding Interoperability HAVi Image/audio compression & expansion MPEG, JPEG, MP3 Digital modulation & demodulation Coding & decoding Error correction Embedded CPU/Real time OS Digital recording Contents distribution Display devices Copy protection Digital AV I/F IMT-2000 CDMA

10. Technologies & Applications Electronic money Contents distribution Entertainment Computers & PeripheralDVD-Video D-VHS DVD-ROM/RAM Digitalcellularphone PDA & H/PC Web device Communications Digital STB Data projector LCDmonitor PC Color printer printer PDP Core Technology LSI Software Embedded CPU Encryption Display User I/F Internet/Intranet Image comp. & exp. (MPEG) r Digital AV I/F Digital mod.& dem. Disc camera Digitalcamera Hometheater

11. World Electronic Equipment Market Unit: Trillions of U.S.dollars (Source: EIAJ) 0.9 (110%) 1.0 (129%) 1.3 (123%) 1.6 Consumer Electronics Computers Communications Others

12. Acceleration of Industry Development - High speed expansion of the industry through digital convergence - New products derived from integration of industries - Creation of new market - Participation of different countries in various related industries - Rapid development in every country in the world

13. Conclusion (1) The new IT industry resulting from the integration of information technology, consumer electronics and communications will benefit users all over the world in the 21st century and continue to develop extremely quickly and at a global level.

14. Conclusion(2) The key phrase is: Integration of three industries through Digital Convergence.

15. Conclusion(3) Japan has contributed to the world in the manufacturing field (mainly in production efficiency and product quality.) Digital Technology Hereafter, we will try to provide a truly rich life for people all over the world at home, in the community and on business by utilizing Digital Technology to the utmost.

16. E=MC 3

17. E=MC 3 Economic growth = Merger of C 3 Consumer electronics Computer Communications