Logitech 2007 Annual Report Download - page 10

NOTEBOOK 800
700
600
500
400
300
200
100
0
MILLIONS
CORDLESS PENETRATION
1,900
1,500
1,100
100
80
60
U.S. DOLLARS
LOGITECH HIGH-END MOUSE
ASP TRENDS
PC INSTALLED BASE
INSTALLED CORDLESS
MICE / KEYBOARDS
CY 01 02 03 04 05 06 FY 00 01 02 03 04 05 06 07
Source: Gartner (Notebook ASP) Source: Logitech estimates based on available market data
4.) Digital Home
In CY 2006 more than 54 million fl at-panel TVs were
sold worldwide, up 91 percent year over year. The face
of consumer electronics is changing with devices offering
increased functionality through more software content,
often resulting in increased complexity. This trend offers
ample opportunity for our input-device and remote-control
businesses. With 25 years of experience integrating
hardware and software to provide the consumer with a
rewarding and productive experience, we believe we’re
well armed for success in the digital home of the future.
Pointing Devices: Revolution Drives Growth
Our pointing devices business continues to thrive even
after 25 years. Total retail pointing devices sales in FY
2007 were up 11 percent year over year to $511 million,
driven by the acceleration of cordless mice growth to
25 percent. The growth in cordless mice was fueled by
the successful launch of our MX™ Revolution and
VX Revolution™ mice as well as the continued adoption
of mice for notebooks.
While roughly 37 percent of PCs shipped in CY 2006
were notebooks, our research and our sales demonstrate
that many notebook users prefer to use a mouse rather
than the notebook’s built-in pointing device. In FY 2007
our sales of mice designed specifi cally for notebook users
grew by 64 percent compared to the prior year.
We believe the success of the MX Revolution demonstrates
that replacement sales are becoming an increasingly
important growth driver. We estimate that 22 percent of
the PC installed base has a cordless mouse or keyboard.
This is both small enough to provide a promising oppor-
tunity to continue increasing cordless penetration and
large enough, with a cordless user community of more
than 100 million, to generate upgrade sales. Our research
shows that 47 percent of the purchasers of high-end mice
have bought 3 mice in just a 3-year period.
Keyboards: Return to Growth
Our sales of keyboards and desktops grew by 14 percent to
$372 million in FY 2007. Sales of our Cordless Desktops,
which combine a cordless keyboard and mouse in the same
package, returned to single-digit growth in FY 2007, with
sales growth accelerating to 16 percent in the fourth
quarter. The EasyCall™ Desktop® for VoIP is just one example
of our ability to leverage the synergies in our product
portfolio. The speaker phone in this product demonstrates
our VoIP audio know-how while the software automates
the VoIP experience on the PC. Our Cordless Desktop
offerings are well positioned to take advantage of the
new navigation features in Windows Vista™ such as Flip3D
and Zoom.
The highlight of the year in the keyboard category, which
grew by 36 percent over the prior year, was the launch of
the ultra-high-end diNovo Edge™ keyboard. This innovative
and stylish standalone keyboard provides the consumer
with the ability to match our best keyboard with the
mouse of their choice.
In FY 2007 we also expanded our keyboard line to
address the opportunity inherent in the growing adoption
of notebook PCs. Our research indicates that many
notebooks are used primarily as a desktop PC replace-
ment rather than as a mobile device. Given the smaller
keyboard and monitor, notebooks present a number of
ergonomic trade-offs for the user. The Logitech® Alto™
,
a combination keyboard and notebook stand, was our
fi rst offering designed to enhance the user’s experience
by embracing the notebook form factor while providing
a full-sized keyboard and USB hub, and raising the monitor
to a more comfortable viewing height.