Logitech 2013 Annual Report Download - page 108

Retail Audio-PC sales experienced decreases of 3% in sales and 6% in units sold in fiscal year 2012, compared
with fiscal year 2011. The decline of this category in fiscal year 2012 was attributable to weakness in our PC
headsets, which decreased 9% in sales and 15% in units sold. Our PC speaker sales remained relatively flat in sales
and units sold from fiscal year 2011 to fiscal year 2012. Geographically, Americas region decreased 4% in sales
and units sold, EMEA region decreased 2% in sales and 10% in units sold, and Asia Pacific region decreased 2%
in sales and was flat in units sold during fiscal year 2012, compared to fiscal year 2011. China sales and units sold
increased by 18% during this period.
Retail Audio—Wearables & Wireless
Our Retail Audio-Wearables & Wireless category is comprised of non-PC audio products, including ear and
headphones, and wireless speakers.
Retail Audio-Wearables & Wireless sales increased 24% during fiscal year 2013, compared with the prior
fiscal year, while retail units sold increased 14% during this period. The increase in sales during fiscal year 2013
was from a 56% increase in our wireless speakers for smartphones and tablets. We experienced strong initial sales
from our new wireless speakers including the Logitech UE Mobile Boombox and Logitech UE Boombox, both
of which began shipping late in the second quarter of fiscal year 2013. During the fourth quarter of fiscal year
2013, this category was negatively impacted by very weak demand for the Logitech UE Boombox. The poor sales
performance of this product was due to a lack of competitive differentiation and a form factor that has proved to be
too large for many consumers. Contrasting, sales continued to be strong for our smaller, lower cost Logitech UE
Mobile Boombox. Sales of our audio wearables products were flat during fiscal year 2013, compared to the prior
fiscal year. We initially experienced strong sales in audio wearables during fiscal year 2013, driven in part by the
strong initial sales of the new Logitech UE products which were initially available exclusively through Apple stores
during the second quarter of fiscal year 2013. During the third quarter of fiscal year 2013, audio wearables sales
were negatively impacted by our participation in an aggressive Black Friday promotion of our UE earphones with a
large U.S. online retailer in the same period of the prior fiscal year. This year we chose not to participate in similarly
aggressive promotions for our new music products launched under the Logitech UE brand, which caused our sales
to decline substantially during the three months ended December 31, 2012, as compared to the same period of the
prior fiscal year. Audio wearables sales continued to decline during the fourth quarter of fiscal year 2013. Despite
exceptional product quality and consistently positive reviews, we have discovered that this category requires a
significant marketing investment to drive lifestyle brand appeal. We chose not to increase our marketing spend to
the level that would be required to clearly distinguish our brand from the competition in the minds of the consumer,
which has had an adverse effect on the sales of this category. By geography, we experienced growth in the Asia
Pacific region, where sales and units sold increased by 94% and 28%, and in the Americas region, where sales and
units sold increased by 8% and 24%. These increases were offset in part by weakness in the EMEA region, where
sales and units sold decreased by 22% and 25%. China contributed significantly to the strong performance in the
Asia Pacific region where sales and units sold increased by 248% and 136% during this period.
We experienced strong performance in our Retail Audio-Wearables & Wireless product category during
fiscal year 2012, compared to fiscal year 2011, with increases of 122% in sales and 79% in units sold. Sales of our
wireless speaker products increased by 405% in sales and 452% in units sold during fiscal year 2012, compared
to fiscal year 2011. This increase was primarily driven by strong sales from our then newly introduced Logitech
Mini Boombox and Logitech Wireless Boombox. Sales of our audio-wearable products also performed well with
increases of 58% in sales and 47% in units sold during fiscal year 2012, compared to fiscal year 2011, driven by
strong demand for our Ultimate Ears line of products. Geographically, EMEA led the way with increases in sales
and units sold of 219% and 169%, followed by the Asia Pacific region with increases in sales and units sold of 106%
and 55%, and by the Americas region with increases in sales and units sold of 92% and 70% during fiscal year 2012,
compared to fiscal year 2011.
Retail Video
Our Retail Video category is comprised of webcams, digital video security systems and TV cams.
106