Vtech 2006 Annual Report Download - page 9

VTech Holdings Ltd Annual Report 200606
Message from Deputy Chairman
“The financial year 2006 was
another remarkable achievement
for our ELP business as we turned
in a record performance.”
Albert LEE Wai Kuen, Deputy Chairman
The financial year 2006 was another
remarkable achievement for our
ELP business as we turned in a
record performance.
The huge success of the V.Smile range,
which we launched in 2004, has been
an important factor. Since the initial
introduction of the console and 10
Smartridges, each year we have
expanded the software library by
adding more popular characters, which
has given us additional sales growth.
Through the success of V.Smile, the
VTech brand in the electronic learning
products category has also enjoyed a
renaissance in the US market, which
has allowed us to regain shelf space
among retail customers and boosted
sales of our traditional ELPs. We have
continued to invest in these and our
traditional range has shown solid
growth, still accounting for a significant
portion of the total ELP revenue.
We have supported this growth in our
business through much more effective
and well targeted marketing and sales
promotions, ranging from TV commercials
to promotional campaigns in partnership
with retailers. We have also ensured
that our products remain competitive
and that growth remains profitable
through much improved planning and
forecasting. These and other measures
have raised operational efficiency and
maintained good costs control.
This is a powerful formula that we will
continue to apply as we move forward.
Our track record of innovation and
adaptation of technology enables us
continually to create exciting new
products and platforms that quickly
gain acceptance among customers
and consumers.
V.Smile is far from a single product. It
has firmly established itself as a distinct
product category – the educational
video game system – that will grow
long into the future as we expand its
reach. In 2005, we launched the
handheld version, V.Smile Pocket and in
this calendar year, we have added
V.Smile Baby and V.Flash, widening the
target age range from 9 months to the
pre-teen years.
We are also selling an increasing array
of accessories, ranging from simple
travel bags to new interfaces that
enhance the value of the current
product platforms. The software library
also continues to grow. In the calendar
year 2006, the software library will
grow to 33 titles in all, and we are
negotiating further titles for the future.
We fully recognise the need to support
these products with the full array of
marketing tools. It is our goal to turn
VTech into a “well recognised brand”
globally within the toy industry and to
this end we continue to bring more
product innovations to the market,
supported by effective and well targeted
marketing and promotional campaigns.
We are firmly established in Europe as a
leader in our field and enjoy increasing
recognition in North America.
VTech is a pioneer in the ELP industry.
We have excellent R&D capability,
strong brand equity and cost effective
manufacturing. This unique combination
makes us highly competitive in the
marketplace.
With the proven success of V.Smile and
our commitment to the traditional
product range, we will continue to
innovate in new categories and develop
high quality educational products that
bring interactive and fun learning
to children.