Plantronics 2009 Annual Report Download - page 14

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PC Audio
Our second largest overall market in the AEG business in terms of revenue is the PC Audio market, first identified with the PC-
speaker. PC Audio, or “active powered” products are defined as self-powered speaker systems used for computers and other multi-
media application systems. Typical applications of PC Audio products include PC audio, gaming, and home theater. We believe there
are opportunities for this market to grow if we:
· continue efforts to maintain our strength in this category domestically, while expanding into international markets; and
· introduce new products that incorporate breakthrough technologies and designs.
Other
The remainder of the AEG products, which represent a small portion of total AEG net revenues, include a wide array of headphone
products for portable stereos, CD players, MP3 players and other audio devices, and home audio and home theater products.
In the second quarter of fiscal 2008, the Company transitioned the responsibility and management of Altec Lansing branded PC
headsets from the AEG segment to the ACG segment, and as a result, effective July 1, 2007, the revenue and resulting gross profit
from all PC headsets is included in the ACG reporting segment within the Gaming and Computer Audio category.
FOREIGN OPERATIONS
In fiscal 2007, 2008 and 2009 net revenues outside the U.S. accounted for approximately 39%, 39% and 38%, respectively, of our
total net revenues. Revenues derived from foreign sales generally are subject to additional risks such as fluctuations in exchange rates,
increased tariffs, the imposition of other trade barriers, and potential currency restrictions. In fiscal 2009, we continued to engage in
hedging activities to limit our transaction and economic exposures, and to mitigate our exchange rate risks. We hedged a portion of
our positions in the Euro and the Great Britain Pound, which constitute the most significant portion of our currency exposure. Further
information regarding our foreign operations, as required by Item 101(d) of Regulation S-K, can be found in the Consolidated
Financial Statements and related notes herein.
COMPETITION
The market for our products is very competitive and some of our competitors have significant financial resources, as well as
production, marketing, engineering and other capabilities to develop, manufacture, market and sell their products.
In the ACG segment, one of our primary competitors is GN Netcom, a subsidiary of GN Great Nordic Ltd., a Danish
telecommunications conglomerate, who competes with us in the office, contact center, and mobile markets and on a limited scale, in
the PC market. In addition, Motorola, Logitech, and Aliph are significant competitors in the consumer headset market and Sennheiser
Communications is a competitor in the computer, office, and contact center markets. We also believe there may be increased
competition from the major cell phone device makers such as Nokia, Motorola, Sony, Samsung and Apple.
We believe the principal factors for ACG to be successful and competitive in each of its markets are the following:
· our understanding of emerging markets and new technologies, such as UC, and our ability to react quickly to the
opportunities that they provide;
· our ability to bring to market products that deliver on performance, product design, style, comfort, features, sound quality,
simplicity, price and reliability;
· maintenance of our brand name recognition and reputation;
· superior customer service, support and warranty terms; and
· effective and efficient distribution channels that allow us to meet delivery schedules.