S O U R C E N E X TJ u l y , 2 0 0 4

h t t p : / / w w w . s o u r c e n e x t . c o m

SOURCENEXT CORPORATIONCompany Brochure

The “KEIKAI Phone” Series“KEIKAI Phone” is software that allows data in mobile phones such as addres-ses and emails to be transferred to PCs for storage and editing. Also it is compat-ible with FOMA （The 3rd generation mo-bile in Japan） and camera-equipped mo-bile phones. It has been receiving the Highest BCN Award for four consecutive years from 2000 to 2003.

The“SOKU”SeriesUtility software that increases speed in vari-ous PC operations without the bothersome settings and manipulations. This is a new genre created by SOURCENEXT. Ever since the introduction of acceleration soft-ware for CD-ROM drives in 1996, wide vari-eties of new products have been develop-ing such as hard-disk speed-up and DSL accelerator, corresponding to the ever-changing progress of personal computers.

ZENRIN DataCom Digital Nationwide MapA map for PCs that employs the map data of ZENRIN DataCom CO., LTD., the No.1 map maker. With its revolutionary price that map software up to now can't compete with, it has shown explosive sales records during its release and has discovered a completely new class of users.

IBM Homepage Builder Version8The SOURCENEXT Selection, which of-fers specially selected products, is proud to release the “Homepage Builder”, by IBM Japan, Ltd. It boasts the greatest share by far in homepage software

The“MEKI-MEKI”SeriesSOURCENEXT has been focusing efforts on educational software from the start. Widely talked about in the media, the “MEKISUU” has been known for improving numerical skills to the point that users can master book-length calculation drills in just thirty minutes （Korean version also available）. The “M-EKI-MEKI” Series, which strengthens basic academic abilities, comes in many more sub-jects and is gaining wide popularity.

The “HONKAKU” SeriesThe“HONKAKU HONYAKU” （English-Japanese Translator） is software that is equipped with a top-class translation en-gine in the industry by NEC and a funda-mental dictionary that includes two million entries. The“HONKAKU YOMITORI” is a high-performance OCR software product that incorporates the image recognition technology of Panasonic Solution Technolo-gies Co., Ltd. Both products are popular for their superior cost performance.

The Best PC Software by Nikkei Business Publication's Readers for

Six Consecutive Years

The Mobile Phone SectorNo.1 in Unit Sales

The Utility Software SectorNo.1 in Unit Sales

The LAN/Internet Software Sector No.1 in Unit Sales

The Education/Learning SectorNo.1 in Unit Sales

The Training Software SectorNo.1 in Unit Sales

The Document Management Software SectorNo.1 in Unit Sales

Maps/Navigation Software SectorNo.1 in Unit Sales

The Epitome of a Flagship ProductWorld-Class Integrated Softwarein the New Lineup

Software for Everyone

Utilities

Video-Related

LLAN/Internet

Maps/Navigation

Education/Learning

Mobile Phones

Training

Document Management and Others

Home

Templates

Sectoral Unit Sales Ranking of PC Software in Electronics Stores（BCN Unit Ranking according to Genre・January to June 2004）

A Breakthrought of 500,000 Users after Just Seven Month on the Market

The“TOKUUCHI” SeriesThe“TOKUUCHI”series, which was introduced in 1997, defying the com-mon belief that typing practice had to be dull and becoming a smash hit, was voted the best PC Software by Nikkei Business Publications readers, and received the Best Software Award for six consecutive years. The unique methods introduced in this soft-ware have been highly appraised.

Virus SecurityAfter just seven month since its release on the market in November 2003,“Virus Security”reached an as-tounding 500,000 users. Not only anti-virus software,it is also an integrated system with functions that pre-vent system break-ins and protects personal data and includes automatic installation that makes operation easier than ever before. These features are what make “Virus Security”so popular. In July 2004, an Anti-Spam function was even supplemented.

StarSuite 7 （Personal Pack）The latest version of the world-class integrated soft-ware that has word processing, spreadsheet, and presentation features compatible with Word, Excel, and Power Point, and even allows its files to be con-verted into PDF files. This product has new soft-ware business model-1 year subscription license - which enabled us to release it at 1,980 yen.

No.1

No.1

Graphics No.3

Image Processing No.4

Graphic Art No.4

Sound-Related

Communication

No.5

No.6

Fonts No.3

Security No.3

Nursing No.2

Integration No.2

System Maintenance No.2

No.1

Hobbies/Entertainment No.4

Data Managementand Others No.4

No.1

No.1

No.1

No.1

No.1

No.1

No.7

No.13

No.7Postcards/Calligraphy

Word Processing/Editing

No.2Spreadsheets/Graphs

SOURCENEXT CORPORATION15th Floor, Roppongi Hills Mori Tower,

10-1 Roppongi 6-chome, Minato-ku, Tokyo 106-6115

tel. 03-5786-7203（information）

fax. 03-5786-7204

http://www.sourcenext.com/

Thanks to all of our customers, we were able to reach No.1 in 2003 PC software unit sales market shares. Our dream is to reach as many people as we can and show just how fun and convenient personal computers can be, delivering an interest in knowledge and excitement. That is why SOURCENEXT is proud to be No. 1 in sales.

C Gosho Aoyama/SHOGAKUKAN・YTV・TMS 1996

C Disney

In Domestic PC Software Sales

Shares in PC Software Unit SalesAnnual Unit Sales Data by Business Computer News

May 2004 Issue, Nikkei TRENDY - Extra Edition, pp 42, 43

1,980Yen 200 Titles

25,000 Stores in Japan

No.1 in Electronics Stores, According to Japan's ACSISS-E3500 POS Data of 3,500 Outlets

in 2003 GfK Japan Studies

Microsoft9.3%

Symantec10.9%

Trend Micro6.1%Creo

4.5%

Others53.5%

SOURCENEXT15.6%

Microsoft8.8%

Symantec12.2%

Trend Micro8.0%

Justsystem4.2%

Others46.2%

SOURCENEXT20.7%

2003 Full Year（January to December）

2004First Half

（January to June）

C Disney

No.1

（=Approx. =$19）

Understandability is the first step to-ward bringing PC Software closer to people. This belief remains unchanged to this day.In a market where there are many products with Western names, SOURCENEXT has been intentionally introducing products with Japanese names, such as“TOKUUCHI”（typing software）,“KYOSOKU”（high speed utilities）, and“KEIKAI Phone”（mobile phone software） since the start.

安心サービス

特打

特単

Winning the ACC Silver Award

The hot Norika commercial

The industry's First “Mileage” for Making Shopping More Fun

Starting with a Product Name with Chinese Characters that are Easy for Japanese Users to Understand

“TOKUUCHI”-the flagship product of SOURCENEXT. The better at typing users become, the more they feel at ease with their personal computers. In 1997, “TOKUUCHI” was introduced at 4,900 yen, which was almost half the price of the usual software up to now, defying the common belief that typing practice had to be dull. With its game-like features “TOKUUCHI” became a smashing hit. It brought personal com-puters and users closer together, open-ing up a completely new market.

Expanding the Entry Market with Typing Software

Safe Shopping with Free Return on Software

Storefront E

mphasis P

olicy

In April 2004, SOURCENEXT intro-duced the worlds first “Mileage Servi-ce”for PC software purchasing, mak-ing it even more enjoyable to shop. It is a popular system where“miles”are added each time when purchasing products. These miles can later be used for participating in competitions for prizes, downloading software, etc.

The first free exchanging service in the software industry, the“Safe Service” was introduced in January 2001. This system is gathering attention from vari-ous fields, as it allows buyers to freely return software that does not operate on their PCs. Since anyone can now buy software without any worries, it is gaining much support from software buyers.

携快電話

Th

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In order to bring PC software closer to users, it is neces-sary for us to be as close to the customers as possible. SOURCENEXT has been fo-cusing on what goes on with-in the stores from the begin-ning because the stores are where the customers actual-ly choose and purchase the products. With this in mind, the utmost care is put into ev-ery single item - from the contents of the packages, to promotional goods, etc. Fur-thermore, we are expanding advertising / publicity activi-ties to invite more and more customers.

Images from the TV commercial

All Kinds of Software - for Just 1,980 Yen!In 2003, SOURCENEXT placed the “commoditizing” strategy into effect for bringing PC soft-ware closer to people. All core products were priced at 1,980 yen under the label, “Soft Price 1,980 Yen.”Furthermore, the “Slim Package”, which is the same size as DVD packages, was in-troduced and new distribution channels such as bookstores, su-permarkets, home improvement stores, and convenience stores were opened. As a result, No.1 in unit sales shares for PC soft-ware was obtained in 2003. With such activities given recognition, the “2003 Nikkei Superior Prod-ucts and　Services Awards Nik-kei Marketing Journal Awards for Superiority” was awarded.

Slim Package -The Mainstream of the Future2004 saw the penetration of the 1,980 Yen series into the market with a new brand name,“Quality 1980”. Along with the expan-sion of the lineup of high-quality products is the growing populari-ty and penetration of the“Slim Package”into the market. The Slim Package consists of only 1/2 the area and 1/5 the volume of conventional paper packages up to now. It makes the products much easier for the customers to take home and has the advan-tage of being easy store. Further-more, it allows retailers to have a larger assortment of products and contributes to the increase in sales, as there will be more opportunities for impulse buying and collective buying.

Through commoditizing, an in-crease in customers who buy PC software for the first time can be seen. In order to make PC software operation smoother, SOURCENEXT has developed an installer that allows users to complete installation by simply inserting the CD into the drive. This feature is being incorpora-ted into almost all the products and is rapidly gaining popularity.

The Automatic InstallationFeature - Just Put the CD In

Regular Packages The Slim Package

2003年日経優秀製品・サービス賞

優秀賞日経MJ賞

®

AutomaticInstallationPatent Pending

SOURCENEXTSoft◎Price1,980

as of June 30th, 2004

BookstoresMaruzen

Kinokuniya BookstoresBunkyodoYurindo

BOOK BAHNYaesu Book CenterJUNKUDO

SANSEIDO BOOKSTOREBOOKSTORE KUMAGAWA

Sanyodo

Home Improvement StoresCAINZKOMERIHomacKeiyoNAFCOJUNTENDOENCHOSEKICHUAYAHADIOSUNDAY

GMSs/SupermarketsAEONCarrefourIto YokadoDaieiSeiyuUNY

HEIWADOSATYBeisia

TENMAYA

Convenience StoresSeven-Eleven Japan

LAWSONFamily Mart

Daily YAMAZAKIMINI STOPThree FSAVE ON

Online Sitesamazon.co.jpVector

impress DirectRakuten Download

@niftyBIGLOBE SOFTPLAZA

GMO PERFECT DIGITAL LIFE7dream.come-honODN

OthersMatsumotokiyoshiDon QuijoteTOKYU HANDS

LoftToysRUsTSUTAYAGEO

Office DEPOTDoCoMo ShopSeikyou

The 5 P's in SOURCENEXT's Commoditizing Strategy

Pricefrom

1,980yenProduct

a wide rangeof products

Placecan be found anywhere

（bookstore, convenience store）

Promotion

Norika Fujiwara（from 2004）

Package

slim packaging

Software for Everyoneわくわく、パソコンソフト

マイル付き200

®

Excellent Quality for Low PricesThe “Quality 1980” Mark

New Channel Stores

2,200

April June August October December

3,800

8,250

17,000

25,000（Stores）

The Increase in Retailers 2003

7

Smile with Mileage

Safe Service

2003 Nikkei Superior Products and Services AwardsNikkei Marketing Journal Awards for Superiority

Corporate Philosophies

Corporate Outline

SOURCENEXT follows the corporate philosophies below, aiming for the realization of our goals through visions that each and every employee has for the future.

Reason for Being : As a corporation that offers products.

Action Guideline : To be faithful to the “SOURCE” in “SOURCENEXT”.

Business Goal : By spreading happiness and excitement to people all around

the globe through excellent products…

Corporate Goal: Becoming the most exciting corporation in the world.

Company Name SOURCENEXT CORPORATIONFounded August 1996Capital 716.8 Million YenEmployee Number 97（as of March 31st, 2004）Sales Volume 8,216.45 Million Yen （March 2004 Term End Results）Representatives President Noriyuki MatsudaExecutive Director Satomi MatsudaDescription of Business Planning, development, and distribution of software and hardware products.Business Office 15th Floor, Roppongi Hills Mori Tower, 6-10-1 Roppongi, Minato-ku, TokyoAverage Age 30.4 years old（as of March 31st, 2004）

SOURCENEXT CORPORATION's Supreme Strategy

Speed　Speedy Solutions, Speedy Performance, Speedy Reactions, Speedy CommercializationOriginality　　Original Services, Uniqueness, AssertionUniversality　　Wide Acceptance, World-Class Excellence, Global ViewsReliability　　Having Win-Win Approach, Accurateness, CommitmentChallenge　　Independence. A Positive Approach. Breakthroughs over Status Quo.Efficiency　　Efficiency in Time and Cost. Goal Awareness and Flexibility in Measures to Reach Goals.

The “SOURCE” in SOURCENEXT

ACT360°Media Ltd. （Canada）

HanbitSoft,Inc. （Korea）

K7 Computing Private Limited（India）

muvee Technologies Pte. Ltd. （Singapore）

Sun Microsystems, Inc. （USA）

AGENDA Co.,Ltd.

Antenna House, Inc.

Impress Corporation

Walt Disney Japan, Ltd.

A-ONE CO., LTD.

NRI SecureTechnologies, Ltd.

Ekitan & Co., Ltd. （TOSHIBA CORPORATION）

Obunsha Co., Ltd

CyberLink Inc.

Shogakukan Production Co., Ltd.

ZENRIN DataCom CO., LTD.

Sony Communication Network Corporation

TAKARAJIMASHA, Inc

DesignEXchange Co., Ltd.

IBM Japan, Ltd.

Oracle Corporation Japan

NEC Corporation

Panasonic Solution Technologies Co., Ltd.

BANDAI VISUAL CO., LTD.

Hitachi Systems & Services, Ltd.

PROTON CO., LTD.

etc.

Main Product Partner Companies

Overseas Companies（in alphabetical order）

SO

UR

CE

NE

XT

in P

rog

ress

SOURCENEXT has made online shopping available in June 2000. Aside from SOURCENEXT's own products, a wide range of excellent products from other companies centering on peripherals have also been specially chosen for our customers. Furthermore, unique sales activities such as the offering of services including mail magazines for registered users and “My Page” with mileage sup-port systems that allow users to see their mileage situa-tions at one glance are taking place. Various services are being expanded to make digital life centering on PCs more enjoyable and more convenient, and will continue to do so through the expansion of further breakthroughs.

What Can be Done On the InternetWhat Can Only be Done Through the Internet

SOURCENEXT.com was reported No.17 in the EC site ranking of all industries in the October 30th, 2003 edition of the Nikkei Marketing Journal. And of course, SOURCE-NEXT.com was No.1 in software related sites. These are the results of direct marketing done through information on bargains sent to the 1.24 million mail news readers.

No.17 in Japan.300 Million Yen in Monthly Sales.1.24 Million Mail News Readers.（as of June 30th, 2004）

Head Office Location

Domestic Companies ）in Japanese order）

For the Tomorrow of Japans PC SoftwareIn July 2004, SOURCENEXT released the Java Integrated Development Envir-onment, “Oracle JDveloper 10g 1 YearLimited” for program developers, sponsored by ORACLE CORPORA-TION. Although it is valid for only one year, it provides the exact same envir-onment of those that surpass the stan-dard versions, which run over 100,000 yen. It is a collaboration that was brought to life through the same vision that both companies had - that the more reasonable tools for creating soft-ware become, the more people who make programs will increase, thus con-tributing to the future of software.

PC Software is Stationary1,980 Yen For Companies, TooNot only are SOURCENEXT’s PC soft-ware products for personal use, but they can be of great help to compa-nies, too.　The “IKINARI PDF” （PDF Creator） which was released in March 2003 is gaining much support as is al-lows distribution to necessary mem-bers at an affordable price. As many of our products are inexpensive and can simply be used like stationary goods, more and more companies have star-ted to buy our software license.

2000 2001 2002 2003

187,107

907,122

2,370,415

3,556,407（thousand yen）

（year）

The Increase in SOURCENEXT.com's Sales

Software as Stationary