Q&A with top management | From the president to investors

December, 2012

Do you think the release of Windows 8 has any impact on your business?

Although a certain amount of effect can be expected, it is limited because of, for example, only partial release of PCs which take advantages of the OS and release of tablet devices yet to be determined.

Do you think the regime change has any impact on your business?

No, there is no direct impact.

Do you think the weak yen has any impact on your business?

There are some negative aspects due to increase in purchase prices, whereas there are some positive aspects such as increase in sales unit prices. In either case, rapid change is not preferable.

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November, 2012

Is“Kindle”available at PC DEPOT?

It will be.
In addition, set-up/support services including those for internet connection are planned for our members.

Do you think the forthcoming national election on December 16 would have any impact on your business?

It would have a certain level of impact on our business. Similar degree of change can be expected as in cases of purchasing durable goods, and it should be one issue for us.

Would you tell us about the outline of the financial results of the second quarter?

The second quarter has seen higher revenues but lower earnings. While sales at the existing stores decreased, but thanks mainly to the effects of newly-opened stores and newly-started services, we could keep higher level of service sales. On the other hand, general and administrative expenses rose due to having more stores, resulting in less ordinary than the same period of previous year. A short movie of the financial results highlights is available from this page.Japanese only)

Do you distribute official applications for smartphones?

In August, we started to distribute our official application.
It can be used for viewing the latest leaflet, searching for the nearest store, and automatic setting for freespots located at each store. It supports both iPhone and Android. We hope you make use ofit!

Do you recommend that your staff should be "qualified officially as salespersons”?

No, we do not recommend specifically obtaining official qualifications.
Expertise and experience are required, so that our staff are able to respond to the growing number of internet devices and to help our customers use them conveniently and comfortably in combination with the network. We assign such skilled personnel called “Smart Life Partner” and have already started to set up an in-house qualification scheme.

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October, 2012

Softbank has bought eAccess. Does this event have any effect on PC DEPOT?

We deem EMOBILE that provides mobile communication services, as an MVNO (Mobile Virtual Network Operator). We also deal with smartphones supplied by Softbank. As brands and services provided by these companies are expected to remain for the time being, there is no effect on our business performance.

How is Windows 8 evaluated, waiting for release? And how do you expect the situation after release?

At this time, we anticipate that Microsoft will release it on October 26 worldwide, as planned. A certain amount of positive effects can be anticipated, such as releasing new products by each PC maker company, as well as various softwares. Moreover, we anticipate that related-products such as tablets would also come to market.

Do you have any menu designed for such as services for preventing cybercrimes?

Defense effectiveness can be enhanced by installing an antivirus software and/or updating the current measures against viruses. We provide such services which many customers have made use of.

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September, 2012

Can we buy iPhone5 at PC DEPOT?

Yes, for now iPhone5 is available at 48 stores of ours.

What kind of effect does iPhone5 have on your business performance?

Sales of smartphones have smaller proportion than those of mass merchandise of electrical appliances. However, the iPhone series have higher proportion among smartphones and accordingly we anticipate, provide that iPhone5 makes a big hit, higher sales of related Mac products and their peripherals, and also increase in services such as setting up and membership services.

Do you think worsening relations between Japan and China has any effect on PC DEPOT?

No, I don’t think there is any direct effect.

Can we buy digital books at PC DEPOT?

Yes. Currently “kobo touch” by Rakuten and those by Sony are available at our stores. We would like to deal more flexibly with products to be released in the future, including Kindle by Amazon.com (USA).

Can we buy head-mounted displays at PC DEPOT?

Yes, you can. (NOTE: In some stores, you may need to order specially.)

Do you think patent litigations concerning tablets and smartphones between Apple (USA) and Samsung (Korea) have any effect on PC DEPOT?

No, I don’t think there is any direct effect.

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August, 2012

Financial result of the first quarter was announced. How do you feel by taking a look back on it?

The first quarter has seen a rise in both sales and profits. Rise in sales due to increase in the number of stores, and full-scale enhancement of technical services and services for smartphones and tablet computers allowed continuously high level of service sales.
In addition, there was also a rise in SG&A expenditure due to opening of new stores, but the aforementioned service sales could absorb SG&A expenditure, thereby achieving more profit than the previous year.
A short movie of the financial results highlights is available from this page.(Japanese only)

Are sales aimed at corporates available on the internet or over the counter?

We do not do any business aimed at corporates.

Release date of the Windows 8 has been set to be on October 26th. Well, is there any restrained buying phenomenon?

I think there is very few restrained buying phenomenon.

Did London Olympics have effect on rise in sales?

During the Olympics, number of customers visiting our stores decreased mainly on weekdays, thus making tough situations for us. But now, it is returning to the same level as before the Olympics.

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July, 2012

Do you expect any benefits for PC DEPOT from the rising demand for tablet computers?

We expect an increase in the product sales resulting from the growth in the sales of tablet computers, and also an increase in the service sales for setting up these computerssetup and installation service-related sales at the time of purchase and during use. PC DEPOT offers continuing long-term support services to customers. Therefore, we expect service sales to increase.

Do you see any London Olympics related demand?

Direct impact on demand is likely to be minimal.
NHK has announced that subscribers will be able to view London Olympic Games on its NHK On Demand Service. The service is available for 30 days after the closure of Olympic Games. PC DEPOT has started the recently announced NHK On Demand setting service to enable computer users, as well as smartphone and tablet users, to view NHK On Demand.
Please refer to the following for the details. (Japanese Only)

Will restrictions on the mobile phone line usage or the discontinuation of the fixed rate system affect PC DEPOT?

We are continuing to strengthen the handling of Internet devices. Consequently, if this strengthening appears to have an effect on sales by communications carriers, this effect will be substantial.
However, our Wi-Fi activities assume that a Wi-Fi environment already exists. For example, our activities include ideas for new ways to use Internet devices and the provision of the necessary environment, such as by setting up devices for customers. Since this is a business model that does not depend on 3G or other mobile communication services, any direct negative effects are negligible. We believe that growth in opportunities to use Wi-Fi associated with 3G and other mobile network connection needs because of an increase in customers’ utilization time will be beneficial.

So-called "Illegal Downloading Law" has been promulgated. How will it affect PC DEPOT?

In our opinion, the above law will not affect us.
However, as company handling large volumes of data, we have taken measures to train employees in proper ways to protect data. An internal audit system has also been established. We will continue to strengthen these measures.

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June, 2012

Do you handle used smartphones?

Not at present.

Do you do same-day delivery for online orders?

Products can be picked up at the customer’s nearest PC DEPOT store.Please click here for further details(Japanese Only)

In July, Sony will launch “nasneTM”. Will you be handling it?

Yes, we will.

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May, 2012

PC DEPOT predicts a rise in both sales and profits in the current fiscal year. What are the reasons for this?

We anticipate a strong performance from services to add to the contribution from opening numerous retail stores in the period leading up to last year. Moreover, we think that the number of people using smartphones and tablet terminals in addition to PCs will rise, and there will be a corresponding growth in the demand for services. We will endeavor to respond to these needs. For details, click here(Japanese Only)

Won’t you be offering a social network service (SNS)?

We plan to create a Facebook site this summer to enable us to send out information to our customers.

The release of the Windows 8 operating system is scheduled. Will this benefit PC DEPOT’s business performance?

We anticipate many benefits over the long term as devices running the OS become increasingly widespread. In the short term, it is unclear whether or the OS will become popular following its release or whether buying will be restrained, but for the current fiscal year, at least, there is no downside.

Will rising electricity prices have an impact?

The impact on SG&A expenditure will not be great, and at present we don’t anticipate any changes in customer consumption patterns from such trends as energy saving.

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April, 2012

Will you be opening PC DEPOT stores in the current fiscal year?

In the first quarter, including a subsidiary, we have decided to open two stores, the Kannana Okudo store (Katsushika-ku, Tokyo) and the Takamatsu By-Pass store (Takamatsu-shi, Kagawa prefecture), on April 27, and the Morioka Head store (Morioka-shi, Iwate prefecture) and Tokaichiba store (Midori-ku, Yokohama-shi) at the beginning of summer. We also plan to open one PC DEPOT PC Clinic on the premises of another volume electronics retailer in Gunma prefecture in May. In the current fiscal year, we will open 5-6 PC DEPOT stores while opening PC DEPOT PC Clinics flexibly in line with the store opening systems.

Will smartphone sales have a major impact on business results?

Owing to the low sales composition ratio, the impact should not be great. In the future, we expect an increase in customer numbers from greater product distribution and a growth in demand for services as use of the devices grows. We intend to engage with this situation positively.

Does the high oil price affect business results?

The direct effects are minor.

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March, 2012

Has the sticker price of computers decreased?

The unit price did decrease by a little more than 10% due to the appreciation of yen, the increase in competition between manufacturers, and the competition in over the counter sales. At the same time there is an increase in the number of computers sold and we believe that this trend will continue.

Does PC DEPOT sell"The new iPad"?

The new iPad is available at 26 shops.Please refer to the following for the details.(Japanese Only)

What measures does PC DEPOT adopt to protect people and facilities in the event of a disaster?

In the head office of the company we established an integrated security department (called in the company the 'cyber-sheriff') that offers remote surveillance of all of the shops, also enabling us to conduct preventive actions according to changes in the weather in all parts of the country, early warnings about earthquakes issued, etc. The company also ensures the safety of all of the shops by making the buildings strong enough and earthquake-resistant according to regional peculiarities. Moreover, to be ready for the emergencies, each of the shops adopts its own measures to minimize the effects of a disaster by estimating the scope of the damages with a hazard map, confirming the evacuation routes and the place of refuge beforehand, and also maintaining a supply of water and emergency provisions. With safety our first priority, PC DEPOT shall adopt further measures as required to ensure the safety of its customers and employees in the future.

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February, 2012

PC DEPOT reported a decrease in profits in the financial results of the third quarter. Are there any plans to change the company's strategy?

PC DEPOT plans to make no changes to the current course and intends to get along with the present strategy of expansion based on opening of new shops. During this quarter, the company did incur significant expenses due to the increase in sales and administrative costs in conjunction with the opening of new shops and some other reasons, but with the increase of operation bases, there was also an increase in service sales. The gross profit reached 106.9% of the corresponding period of last year, and the ratio of gross profit to net sales during this quarter also reached a substantial proportion of 30%, showing a stable rising trend every year.

Are there any topics of importance expected to appear in the personal computer market?

This year two most prominent PC operating systems, Windows and Mac, are releasing new versions, "Windows 8" and “Mountain Lion" respectively. When new devices carrying the new operating systems appear on the market, PC DEPOT will benefit from an increase in demand due to an increase in the number of customers making replacement purchases and also of those requiring various technical services, for example with data migration accompanying the replacement purchase.

Is PC DEPOT going to be influenced by the launch of LTE services conducted by a number of companies?

In addition to LTE services offered by other companies, PC DEPOT also plans to offer its own LTE data communication as an MVNO. As the service enables high-speed communication, we can expect it to be used not only on mobile terminals such as tablets or notebook computers, but also on high-performance personal computers, and we anticipate increases not only in the product sales, but also in our Premium Services (monthly-membership maintenance services).

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January, 2012

Do female customers often use the shops of PC DEPOT?

Recently the number of women coming to our shops is increasing. To accommodate the increase in the number of women using personal computers, we strive to expand the menu of available services further, for example offering sets of equipment limited to female customers, providing support for smartphone users, or setting up printers and other peripheral equipment, this way accommodating the needs of this new customer stratum.

Do you expect any benefits for PC DEPOT from the rising demand for smartphones?

We expect an increase in the product net sales resulting from the growth in the sales of smartphones, and also an increase in the services sales of setting up wireless Internet connection or connection to personal computers. Another benefit is that as PC DEPOT offers various help to customers for the whole period they use a smartphone, we expect an increase in the service sales resulting from the fact that in case of smartphones after service is offered continuously on a long term basis.

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