Vtech 2004 Annual Report Download - page 15

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places. In addition, the resources
allocated to the design engineering
teams have been proportionately
expanded to increase the number of new
innovative products created and shorten
the development cycle considerably.
The benefits of our new approach to R&D
are readily evidenced in the completely
revamped 2004 products line-up. In
October 2003, we launched the industry’s
first TV Learning System, V.Smile,
specifically designed for children
between the age of 3–7 years old.
V.Smile offers to “turn game time into
brain time” by combining educational
value and game contents in a form
currently available only to older children.
VTech produces both the console and the
interchangeable game cartridges. Our
customers’ responses to V.Smile have
been enthusiastic. In addition, our new
product line-up also included fresh new
features such as pen writing recognition
technology that have increased
customers’ acceptance.
As an important strategy for our
electronic learning products business,
V.Smile and certain other electronic
learning products now feature the
world’s most famous children’s cartoon
characters. Various licensing agreements
were concluded in the financial year
2004. The incorporation of popular
children’s cartoon characters such as
Winnie the Pooh, Lion King, Little
Mermaid, Mickey & Friends, Scooby-Doo,
Care Bears, Brainy Baby and Spiderman greatly enhances
the attraction of our products to children and
recognition among parents. More licensed characters
will be added in future to add value to our products.
During the financial year 2004, VTech also began laying
the groundwork to expand into new markets in Latin
America, Scandinavia, Central and Eastern Europe, and
Asia Pacific.
The new and revamped product lines have successfully
enabled VTech to regain shelf space in the US market
and further expand our dominance in Europe. These
would result in a significant bounce back in revenue and
further improvement in profitability in the financial year
2005.
Innovation
Synergy
Drives
Review of
Operations
13
VTech Holdings Ltd Annual Report 2004