Logitech 2011 Annual Report Download - page 142

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on financial measurements for the fiscal year ended March 31, 2011 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.
Our peripherals and video conferencing industries are intensely competitive. The peripherals industry is
characterized by short product life cycles, continual performance enhancements, and rapid adoption of technological
and product advancements by competitors in our retail markets, and price sensitivity in the OEM market. We
experience aggressive price competition and other promotional activities from our primary competitors and from
less established brands, including brands owned by some retail customers known as house brands, in response to
declining consumer demand in both the retail and OEM markets. We may also encounter more competition if any
of our competitors in one or more categories decide to enter other categories in which we currently operate.
In addition, we have been expanding the categories of products we sell, and entering new markets, such as the
market for enterprise video conferencing. We remain alert to opportunities in new categories and markets. As we
do so, we are confronting new competitors, many of which have more experience in the categories or markets and
have greater marketing resources and brand name recognition than we have. In addition, because of the continuing
convergence of the markets for computing devices and consumer electronics, we expect greater competition in the
future from well-established consumer electronics companies in our developing categories as well as future ones
we might enter. Many of these companies have greater financial, technical, sales, marketing and other resources
than we have.
We seek to fulfill the increasing demand for interfaces between people and the expanding digital world across
multiple platforms and user environments. The interface evolves as platforms, user models and our target markets
evolve. As access to digital information has expanded, we have extended our focus to mobile devices, the living
room, and the meeting room, in addition to the PC, as access points to the Internet and the digital world. All of these
platforms require interfaces that are customized according to how the devices are used. We believe that continued
investment in product research and development is critical to creating the innovation required to strengthen our
competitive advantage and to drive future sales growth. We are committed to identifying and meeting current
and future customer trends with new and improved product technologies, as well as leveraging the value of the
Logitech and LifeSize brands from a competitive, channel partner and consumer experience perspective. We believe
innovation and product quality are important to gaining market acceptance and maintaining market leadership.
The broadening of our product lines has been primarily organic. However we also seek to acquire, when
appropriate, companies that have products, personnel, and technologies that complement our strategic direction.
As part of our corporate strategy, we plan to increase investments in and realign resources to focus on certain
market adjacencies, geographic markets or new categories, including the China market, tablet peripherals, video
communications and UC (unified communications), which is the integration of enterprise-class collaboration and
communications solutions such as voice mail, e-mail, chat, presentation sharing and live video meetings.
We continually evaluate our product offerings and our strategic direction in light of current global economic
conditions, changing consumer trends, and the evolving nature of the interface between the consumer and the
digital world.
Summary of Financial Results
Our total net sales for the fiscal year ended March 31, 2011 increased 20% compared with the fiscal year
ended March 31, 2010, based on increased demand in our Americas and Asia Pacific regions, including a strong
performance in China, and sales of our LifeSize products, offset in part by unexpectedly weak performance in our
EMEA region in the last quarter of the fiscal year.