Logitech 2003 Annual Report Download - page 26

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• Technology and Industrial Design Excellence. Logitech understands the balance between features and
complexity, functionality and style, price and performance. The Company believes its ability to produce world
class, user-centric industrial designs, coupled with innovative technologies that deliver true benefit to the
consumer, set it apart from competitors. Logitech has repeatedly received awards for design and innovation.
During the past year, the Company’s product design received the following awards: “red dot”, IDEA (Industrial
Design Excellence Award), several iF Industrie Forum Design awards, and a CES Innovations Award.
Logitech’s cutting-edge technology, evidenced by products such as the Z-680 Speakers, the Pocket Digital
Camera, MX700 Mouse, MOMO Racing Force Wheel, and others, garnered numerous top billings -- Editors
Choice, Product of the Year, Best of What’s New, and more, in a variety of publications such as Popular Science,
PC World, Computer Gaming World, Maximum PC, and many additional media worldwide.
• Retail Brand and Distribution. The Company believes the Logitech brand name and industrial designs are
recognized worldwide as symbols of product quality, innovation, ease of use and price performance. The
Company enjoys a strong and growing brand presence in more than 100 countries. During the fiscal year ended
March 31, 2003, the Company sold over 43 million Logitech branded products. The Company believes that in
the consumer market, brand identity and brand awareness are important components of the purchase decision,
and that as competition intensifies, the ability to secure shelf space will increasingly become a competitive
advantage. Logitech’s brand has enabled the Company to build an extensive retail distribution network and
obtain this critical shelf space. Today, the strength of this brand is apparent in the PC OEM channel as well,
where systems manufacturers and integrators are choosing to bundle Logitech-branded products with their
offerings.
• Strength on the Desktop. Logitech has expanded its product portfolio to encompass a broad range of interface
devices that people use every day as they work, communicate and play at their desktops. The Company’s
interface devices bring together on the desktop a broad variety of products that individuals—business people,
home users, gamers and others—need to make their time on the Internet and time at the computer more
productive, comfortable and enjoyable. As a result, the Company is positioned to offer “one-stop shopping” for
accessories that have been designed to work seamlessly together.
Logitech aggressively pursues several important aspects of today’s desktop, including the freedom and flexibility
of cordless solutions, easy internet-based visual communication and innovative technologies.
• Volume Manufacturing Capability Resulting from Strong OEM Relationships. The Company believes its
established manufacturing capabilities are a significant competitive advantage. Over the past ten years the
Company has built a significant manufacturing presence in Asia where its ISO 9000-certified manufacturing
facilities are currently producing over 55 million units per year. As a result, Logitech has been able to maintain
strong quality process controls and has realized significant cost efficiencies. Manufacturing expertise extends
beyond production to include logistical support, just-in-time supply and process engineering.
This world-class manufacturing capability and expertise allows Logitech to continue its long-established
relationships with large OEM customers. The Company currently sells to the majority of the world’s largest PC
manufacturers, as well as to most of the next layer of systems manufacturers and integrators. Because Logitech’s
engineering and design staff works collaboratively with OEM customers on the specifications for future
products, the Company believes its OEM relationships provide it with valuable insight into the future of the
computer marketplace and technological trends.
• Global Presence. Logitech is a global company capable of drawing upon the strengths of its global resources,
global distribution system and geographical revenue mix. With manufacturing facilities in Asia, engineering
staffs in the U.S., Asia and Europe, major distribution centers in North America, Europe and Asia, as well as
sales and marketing offices in major cities worldwide, the Company has access to leading technology, markets,
personnel and ideas from around the world. The Company believes that by fostering a strong international
culture, it is able to capitalize on the worldwide marketplace by meeting the needs of customers in many
countries.
Industry Overview
Increasingly affordable prices and wider availability of business, consumer and education applications have
created a very large installed base of personal computers. The market penetration of PCs and other information
access devices, already high in developed countries, is likely to increase worldwide.
In addition, continuing growth in processing power and communications bandwidth, the increased accessibility
of digital content and the pervasive access and use of the internet, create opportunities for new applications, new
users and dramatically richer interactions between users and digital information.