Logitech 2003 Annual Report Download - page 119

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These developments create new demands by users wanting to take full advantage of this increased processing
power, new applications and new technologies in an intuitive, productive, comfortable and convenient manner.
Today’s PCs have evolved from productivity tools for word processing into affordable multimedia appliances or
“digital hubs” capable of creating and manipulating vast amounts of graphics, sound and video. The interface devices
sold with most new units are quite limited in the functionality they provide. This is true especially since the need to
offer new personal computers at low prices dictates basic, no frills peripherals, for example a basic mouse and
alphanumeric keyboard. Logitech believes the expanded PC capabilities present a significant opportunity for
companies that provide innovative personal interface products for the computer, since basic input devices alone
cannot effectively harness this new power and fully enable many of the newest applications.
Therefore, on one hand, PC manufacturers continue to require large volumes of simple interface devices. On the
other hand, the after-market (that is, the market for peripheral upgrades and add-ons sold separately from the basic
PC) grows as consumers demand more function-rich interface tools.
In addition, Logitech believes that trends established in the consumer electronics market, such as brand identity,
affordability, ease of installation and use, as well as visual appeal, are rapidly becoming important aspects of PC and
personal interface device purchase decisions.
Logitech also believes that personal interface device opportunities increasingly exist around non-PC platforms,
such as video game consoles and mobile phones. As these additional platforms deliver added functionality, increased
processing power and growing communication capabilities, Logitech expects demand for add-on, complementary
devices, connected to these platforms, to increase.
Business Strategy
Logitech’s objective is to strengthen its leadership in the growing market for personal interface products, linking
people to the digital world wherever and whenever they need to access digital information to communicate, learn and
play. The Company has historically served the installed base of PCs by offering innovative personal interface devices
to address the needs of the desktop. Whereas PCs are being used more and more as the digital hub to access
information and communicate, other platforms such as game consoles and cell phones are also becoming a rich
resource for people to access information, communicate and enjoy an expanding offering of interactive games. We
believe that the Company is well positioned to take full advantage of the many opportunities in this growing
marketplace.
In order to attain this objective, Logitech intends to pursue new areas for growth while continuing to protect and
build on the Company’s current strengths. This strategic direction focuses on personal interface products surrounding
three digital environments:
• The Office – Desktops
• The Living Room – Game Consoles
• The Mobile Environment – Notebooks, Cell Phones, and Digital Writing
The Office Environment
Logitech has successfully broadened its penetration of its existing desktop presence by introducing new and more
efficient pointing devices into the customer base. In addition, Logitech has expanded beyond its traditional role as a
provider of pointing devices for the desktop into a leading brand for video imaging products, keyboards, PC audio
products and control devices for 3D CAD/CAM users. The Company has the ability to introduce an even greater
number of essential interface devices that people touch and use every day.
The Living Room Environment
As the game console market expands with new platforms such as PlayStation®2, Nintendo GameCube™ and
Xbox™, we believe our wide range of products will attract a larger number of gamers. Logitech offers a broad
spectrum of products including driving wheels, cordless game pads, audio headsets, keyboards, mice and cameras.
With many of its products, Logitech can efficiently leverage its investments from one platform -- desktop PC’s -- into
new platforms -- game consoles.
The Mobile Environment
As digital information and communication are evolving into the mobile environment, the opportunity exists for
Logitech to reach a broader array of platforms. The growing number of users of cell phones and notebook computers