Plantronics 2006 Annual Report Download - page 21

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part i
)Our understanding of changing market trends, technologies and consumer needs, and our ability
to capitalize on the opportunities resulting from these market changes.
We believe we compete successfully with respect to these factors; however, if we do not continue to do so,
our business, financial condition and results of operations may be adversely affected. In addition, we
cannot guarantee that our products will continue to compete favorably, or that we will be successful in the
face of increasing competition from new products introduced by existing competitors or new companies
entering the markets in which we are operating.
PRODUCT DEVELOPMENT
We believe that the future success of our business depends on our ability to enhance our existing
products, to develop new products based upon our core and latest technologies at a cost which is at least
as low as our competitors, qualify these products with our customers, successfully introduce these
products to existing and new markets on a timely basis, and to commence and sustain volume production
to meet customer demands.
During fiscal 2006, we developed innovative products that enabled us to better address changing
customer demands and emerging market trends. Specifically, we introduced a number of new products,
which featured new technologies to address both the Audio Communication and Audio Entertainment
market trends. Each segment has an operational model designed to bring the right products to market at
the right time, and we will continue to improve our development processes during fiscal 2007.
We also have a number of new product and core technology development programs underway to further
broaden our product lines and have been successful in obtaining a number of key patent disclosures and
filings over the past year. Our product development processes for a number of products incorporate
intelligent re-use of platform and product architecture hardware as well as software. During fiscal 2007,
we will continue our efforts towards a lean development process through strategic architecting, increased
use of software tools, and better training.
The success of new product introductions is dependent on a number of factors, including appropriate new
product selection, timely completion and introduction of new product designs, cost-effective manufactur-
ing of such products, quality of new products, the acceptance of new technologies such as Bluetooth, and
general market acceptance of new products. Although we have attempted to determine the specific needs
of the telephony, entertainment, mobile, computer, residential and home-office user markets, there can
be no assurance that the market niches that we have identified will, in fact, materialize or that our
existing and future products designed for these markets will gain substantial market acceptance. Further,
assuming the markets develop and our products meet customer needs, there is no assurance that such new
products can be manufactured cost effectively and in sufficient volumes to meet the potential demand.
Traditionally, the technology of telephone headsets has evolved slowly, and our product life cycles have
historically been relatively long. The next generation products usually include stylistic changes and
quality improvements, but these products are based on similar technology. Our newer emerging
technology products, particularly in the mobile and computer markets, are exhibiting shorter life cycles
more in line with the consumer electronics market and are consequently more sensitive to market trends
and fashion. With the acquisition of Altec Lansing, we have increased our consumer business
significantly in the electronics markets. We believe that changes in technology will come at a faster pace.
Our future success will be dependent, in part, on our ability to develop products that utilize new
technologies and to adapt to changing market trends quickly. In addition, to avoid product obsolescence,
we will continue to monitor technological changes in telephony, as well as users’ demands for new
technologies. Failure to keep pace with future technological changes could adversely affect our revenues
and operating results.
AR 2006 ⯗15