Logitech 2012 Annual Report Download - page 167

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
in our Annual Report on Form 10-K for the fiscal year ended March 31, 2012, available at www.sec.gov, under the
caption ‘‘Risk Factors,’’ and below in “Quantitative and Qualitative Disclosures about Market Risk.’’
Overview of Our Company
Logitech is a world leader in products that connect people to the digital experiences they care about. Spanning
multiple computing, communication and entertainment platforms, we develop and market innovative hardware
and software products that enable or enhance digital navigation, music and video entertainment, gaming, social
networking, audio and video communication over the Internet, video security and home-entertainment control. We
have two operating segments, peripherals and video conferencing.
Our peripherals segment encompasses the design, manufacturing and marketing of peripherals for PCs
(personal computers), tablets and other digital platforms. Our products for home and business PCs include mice,
trackballs, keyboards, interactive gaming controllers, multimedia speakers, headsets, webcams, and lapdesks. Our
tablet accessories include keyboards, keyboard cases and covers, headsets, wireless speakers, and stands. Our
Internet communications products include webcams, headsets, video communications services, and digital video
security systems. Our digital music products include speakers, earphones, custom in-ear monitors and Squeezebox
Wi-Fi music players. For home entertainment systems, we offer the Harmony line of advanced remote controls. For
gaming consoles, we offer a range of gaming controllers and microphones, as well as other accessories.
Our peripherals research and product management teams are organized along product lines, and are
responsible for product strategy, industrial design and development, and technological innovation. Our 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
sales and marketing groups. Our retail sales and marketing activities are organized into three geographic regions:
Americas (including North and South America), EMEA (Europe-Middle East-Africa), and Asia Pacific (including,
among other countries, China, Taiwan, Japan, India and Australia). In addition, at the start of fiscal year 2012 we
established an organization focused on developing and selling products for enterprise markets, including peripherals
for unified communications applications. This group combines product management and sales personnel for
enterprise products, including our OEM (original equipment manufacturer) sales team, into one organization.
We sell our peripheral products to a network of distributors, retailers, and OEMs. Our worldwide retail network
includes wholesale distributors, consumer electronics retailers, mass merchandisers, specialty electronics stores,
computer and telecommunications stores, value-added resellers, and online merchants. Sales of peripherals to our
retail channels were 86% and 85% of our net sales for the fiscal years ended March 31, 2012 and 2011. The large
majority of our revenues have historically been derived from sales of our peripheral products for use by consumers.
Our OEM customers include the majority of the world’s largest PC manufacturers. Sales to OEM customers were
8% and 9% of our net sales for the fiscal years ended March 31, 2012 and 2011.
Our video conferencing segment encompasses the design, manufacturing and marketing of LifeSize video
conferencing products, infrastructure and services for the enterprise, public sector, and other business markets.
LifeSize products include scalable HD (high-definition) video communication endpoints, HD video conferencing
systems with integrated monitors, video bridges and other infrastructure software and hardware to support large-scale
video deployments, and services to support these products. The LifeSize division maintains a separate marketing
and sales organization, which sells LifeSize products and services worldwide. LifeSize product development and
product management organizations are separate, but coordinated with our peripherals business, particularly our
ANNUAL REPORT
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