1.Business expansion focusing on sound and music

We are a global company selling musical electronic devices developed for a wide range of customers, including professionals and amateurs in about 130 countries. Our Japanese headquarters focuses on product development and marketing while overseas sales activities are performed via group companies and sales agencies. We adopt a fabless system in which production is entrusted to overseas EMS companies*.

 

Our products are intended for markets and customers in various fields, including not only musicians who play musical instruments and artists who produce music, but also photographers, journalists, youtubers, podcasters, and content creators in the broadcasting and film industries. Although individual markets are huge and spread globally, there are niche users who pay particular attention to good quality sound in some segments of each market. While the size of such global and niche markets are large enough for us to expand our business, it is difficult for big enterprises to enter such markets because they would not be able to generate profit. Although our products are intended for users in such markets with relatively fewer competitors, our main focus is on the music and musical instrument markets. This attitude is the reason we have continually received support from users who pay particular attention to sound.

 

As a fabless company with a low ratio of fixed assets, we strive to develop our businesses while expanding our user segments by continually cultivating global niche markets related to sound and music by concentrating our business resources on product development.

 

*EMS companies:Companies contracting production of electronic devices

 

2.Global Development, Production, Sales Systems

Development System

About half of our employees are development engineers, and most of them play some musical instruments on a daily basis, allowing them to develop products from the user’s viewpoints. Our development system is characterized in that internal engineers are focusing on core technologies, including DSP programming, design of user interfaces, firmware design, design of analog electronic circuits, and voicing (creation of sounds), while making use of the excellent resources of external companies for other design-related work.

 

Production System

Without our own factories, we outsource the manufacturing process to EMS companies in China and Southeast Asia. We attach great importance to maintaining good cooperative relationships with EMS companies, because cost reduction enabled by efficient production systems and implementation of state-of-the-art technology enabled by downsizing of parts is closely related to product planning. However, with regard to quality control, we adopt strict in-line and delivery inspection systems administered by our subsidiary Zoom DC to place priority on consistent internal standards. As stated here, we build an optimum production system to flexibly respond to market needs and seasonal demand fluctuations while suppressing production-related fixed costs, aiming to providing users with products ensuring high quality products and excellent cost performance.

 

Sales System

Our products are initially sold to overseas import and sales agencies and then resold to regional retailers (musical instrument stores, industrial equipment stores, consumer electronics stores, and online retailers). Subsidiaries and affiliated companies represented by Zoom North America in North America, Zoom UK in the United Kingdom, and Mogar Music in South Europe build a flexible sales system unique to their region by following a consistent branding strategy, while more than 50 import and sales agencies, including those in other regions are encompassing our global logistics networks. In Japan, our Japanese headquarters serve as an import and sales agency, directly selling our products to musical instrument stores, wholesalers, consumer electronics stores, and online retailers.

 

3.Our Brand Name is Bigger Overseas than in Japan

Our overseas sales occupy about 90 percent all sales, which means our brand is known more overseas than in Japan. The biggest market is the United States with sales for Zoom North America in charge of sales in North America reaching 31% of consolidated sales. This is followed by 18% from southern Europe consisting of Italy, France, Spain, and Portugal and 12% from Central Europe consisting of Germany, Benelux countries, Austria, Poland, Czech Republic, Slovakia, and the Baltic States. While sales from China currently occupy only 4%, the market is rapidly growing as Western culture disseminates more than ever. Note that, while sales networks in Southeast Asia, Latin America, and the Middle East included in Others, 10% still rely on the conventional method centered on musical instrument stores with the gradual emergence of Western-style consumer electronics stores and online retailers; these markets are becoming potential growing markets along with the increase of disposable incomes in middle-class families in these regions.

 

4.Various Product Categories

Although our business segment is only musical electronic devices, we have a wide range of product categories to respond to the various needs of artists and creators.

 

●Handy Audio Recorder (HAR)

Our main category occupies 53% of total sales. Although it was initially developed as a recorder intended for musicians for recording their musical performances, its applications are widely spread in various fields beyond the expectations at the time of development. Currently, the product is also used for industrial purposes in the broadcasting and film industries and as a tool for creators or online distribution. Now the product name “handy recorder” is well known as a common noun in the market.

 

●Multi Effector (MFX)

This is one of our main categories occupying 11% of sales. We have continually expanded and upgraded the product lineup for over 30 years since the release of our first product Zoom 9002. This product can change tones in various ways by connecting to an electric guitar and bass or acoustic guitar. While the so-called stomp box or compact effector changes a single tone only, the multi effector produces sounds by combining multiple tone changes in a single unit and saves various combinations in the built-in memory.

 

●Digital Mixer (DMX)/Multi Track Recorder (MTR)

This is a tool for creating stereo work by recording musical performances separately for vocal, guitar, bass, piano, keyboard, and drums and balancing or arranging them. The digital mixer (DMX) is an application of this technique enabling mixing and recording at the same time in small live performance venues. Placing high priority on usability, portability, and simple functionalities, the product concept is a mixer/recorder that can be easily used not only by mixing engineers but also by musicians.

 

●Professional Field Recorder (PFR)

An industrial recorder ensuring high performance and reliability and advanced features. In addition to the standard built-in time code transfer/reception function for post-production (editing), substantial consideration was made for outdoor use. The product is compatible with industrial high-capacity battery packs, waterproof, and can be used under a wide range of temperatures and levels of humidity. It is not only used for broadcasting or producing TV programs or as an audio recording tool for recording sounds in film locations or those created by sound designers, but also for producing video content for online distribution. The product has achieved a high reputation for its excellent portability and cost performance.

 

●Handy Video Recorder (HVR)

This is a video camera especially designed for musicians. While the product ensures image quality, functionality, and portability equivalent to action cameras, it also features a microphone for recording high resolution sounds and functionality equivalent to our handy recorder. With this product, musicians can record and distribute musical activities, review their performance in rehearsals, practice to improve their skills, or simply upload videos on video sharing websites such as YouTube and Vimeo. Thanks to its 4K image quality, the product can also be applied for fragmentation of scenes of TV programs and films.

 

Other categories include the mobile device accessory (MDA) that is directly attached to the lightning connector on iOS devices to transform it into a handy recorder, audio interface (AIF) in charge of input and output of sounds to or from computers to be used for producing music or DJ performances, ARQ rhythm tracks (ARQ) applied for producing electric dance music (EDM) tracks, and live performances.