Logitech 2010 Annual Report Download - page 127

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ANNUAl REPORT
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations
contains forward-looking statements that involve risks and uncertainties. The Company’s actual results could differ
materially from those anticipated in these statements as a result of certain factors, including those set forth above in
Item 1A “Risk Factors,” and below in Item 7A “Quantitative and Qualitative Disclosures about Market Risk.”
Overview of Our Company
Logitech is a world leader in personal peripherals for computers and other digital platforms. We develop
and market innovative products in PC navigation, Internet communications, digital music, home-entertainment
control, gaming and wireless devices. With our acquisition of LifeSize Communications, Inc. in December 2009,
we entered the market for enterprise video conferencing products and services. Our products combine essential
core technologies, continuing innovation, and award-winning industrial design.
Logitech operates in two industry segments, personal peripherals and video conferencing.
Our personal peripherals segment encompasses the design, manufacturing and marketing of personal
peripherals for personal computers and other digital platforms. Our research and product management teams are
organized along product lines, and are responsible for product strategy, industrial design and development, and
technological innovation. Our global marketing and sales organization helps define product opportunities and
bring our products to market, and is responsible for building the Logitech brand and consumer awareness of our
products. This organization is comprised of retail and OEM (original equipment manufacturer) sales and marketing
groups. Our retail sales and marketing activities are organized into three geographic regions: Americas (including
North and South America), Europe-Middle East-Africa (“EMEA”), and Asia Pacific. Our OEM sales team is a
worldwide organization with representatives in each of our three regions. Our OEM customers include the majority
of the world’s largest PC manufacturers.
Our video conferencing segment encompasses the design, manufacturing and marketing of LifeSize video
conferencing products and services for the enterprise and small-to-medium business markets. The LifeSize segment
maintains a separate marketing and sales organizations. The LifeSize product development and product management
organizations are separate, but coordinated with our personal peripherals business, particularly our webcam and
video communications groups. Based on the financial measurements for the fiscal year ended March 31, 2010 as
evaluated by Logitech’s Chief Executive Officer, the LifeSize operating segment does not meet the quantitative
threshold for separate disclosure of financial information required by generally accepted accounting principles in
the United States.
For the PC, our products include mice, trackballs, keyboards, interactive gaming controllers, multimedia
speakers, headsets, webcams, 3D control devices and lapdesks. Our Internet communications products include
webcams, headsets, video communications services, and digital video security systems for a home or small business.
Our LifeSize division offers scalable high-definition (“HD”) video communication products, support and services.
Our digital music products include speakers, earphones, and custom in-ear monitors. For home entertainment
systems, we offer the Harmony line of advanced remote controls and the Squeezebox and Transporter wireless
music solutions for the home. For gaming consoles, we offer a range of gaming controllers, including racing wheels,
wireless guitar and drum controllers, and microphones, as well as other accessories.
We sell our peripheral products to a network of retail distributors and resellers and to OEMs. Our worldwide
retail network for our peripherals includes wholesale distributors, consumer electronics retailers, mass merchandisers,
specialty electronics stores, computer and telecommunications stores, value-added resellers and online merchants.
Our sales to our retail channels for our peripherals were 89% and 85% of our net sales for the fiscal years ended
March 31, 2010 and 2009. The large majority of our revenues have historically been derived from sales of our
personal peripheral products for use by consumers.