Logitech 2005 Annual Report Download - page 55

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Logitech believes its future lies not only in its strong internal technical resources, but also in partnering with
other industry leaders with complementary technologies that promise to make the interface more productive,
natural and enjoyable. For example, this partnering has resulted in devices that provide enhanced realism by
incorporating force feedback or optical sensing, and it has resulted in digital writing technologies.
Product Definition, 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, sets it apart from competitors. Logitech
has repeatedly received awards for design and innovation. During 2004, the Company’s product designs received
the following awards: “red dot,” Industrial Design Excellence Awards (IDEA), iF Industrie Forum Design
awards, Good Design Awards, ID Magazine Awards, and a CES Innovations Design and Engineering Award.
Logitech’s advanced technology, evidenced by products such as the MX™1000 Laser Cordless Mouse, V500
Cordless Notebook Mouse, diNovo™Media™Desktop, Harmony®676, the QuickCam®Orbit™and QuickCam®
Sphere, the Z-5500 Digital Speakers, 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, PC
Magazine, Computer Gaming World, Maximum PC, and in many other media outlets worldwide.
Technological Innovation
Logitech has long been at the forefront of technological innovation, with a list of more than 65 industry
“firsts” to its name and a patent portfolio of more than 100 patents.
The Company has continually embraced new connectivity technologies and standards. The Company led in
optical sensing technology with the opto-mechanical mouse in 1982. The Company was also among the first to
market a digital still camera in 1991. Logitech demonstrated the first working USB prototype at the Fall Comdex
in 1995. In 2001, Logitech introduced the first cordless optical mouse. With the Cordless Presenter™,the
Company introduced its first Bluetooth personal peripheral and in 2004, with the MX™1000, the first laser
mouse. Also in 2004, Logitech extended the use of its proprietary 2.4 GHz technology to its mice products,
further reducing power consumption and size, and enhancing the range of operation. Logitech continues to
monitor the connectivity environment, in order to optimize the user experience when interfacing with digital
information.
Retail Brand
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 fiscal year 2005, the Company sold 58 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 to obtain this critical shelf space. The strength of this brand
is apparent in the OEM channel as well, where systems manufacturers and integrators, as well as game
publishers, and other partners are choosing to bundle Logitech-branded products with their offerings.
Volume Manufacturing Capability Resulting from Strong OEM Relationships
The Company believes its 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 more than 60 million units per year. As a result, Logitech has
been able to maintain strong quality process controls and has realized significant cost efficiencies. Further, the
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