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VTech Holdings Ltd Annual Report 2009 11
warehouse clubs sold well, while
the AT&T DECT 6.0 products with
Bluetooth technology outperformed
the competition, as their Bluetooth
feature became highly regarded
by consumers.
A new product category, AT&T
cordless headsets, was introduced in
October last year. These products
have been well received by the
market, although shipments have
so far been on a modest scale.
Revenue for the financial year 2009
at the TEL business declined 9.8%
over the previous financial year
to US$620.7 million. The business
accounted for 42.9% of Group
revenue, against 44.3% in the previous
financial year. The decline was mainly
due to the poor market conditions in
the United States, following the onset
of problems in the global credit
markets.
As in the financial year 2008, sales to
Europe, Asia Pacific and other markets,
where we mainly operate an ODM
business, continued to expand. Sales
to Europe rose by 7.4% to US$193.7
million, equivalent to 31.2% of total
TEL revenue. VTech’s market share
continued to grow, as customers
placed more orders with us owing
to our strong cash position and the
weakening of other suppliers. In
September 2008, we signed an
exclusive supplier agreement with
Deutsche Telekom and the co-branded
“T-Home/VTech” products began
shipping in January 2009.
Sales to Asia Pacific and other
markets grew 38.5% and 40.5% to
US$14.4 million and US$28.8 million
respectively. We have made good
progress in penetrating into Latin
America, Middle East, Australia and
India, demonstrating the success of
the Group’s strategy of geographic
expansion.
Sales to North America, where we
operate a branded business, declined
by 19.5% to US$383.8 million and it
accounted for 61.8% of total TEL
revenue. The decline in sales was
attributable to slowing demand and
a reduction of inventories by retailers,
in anticipation of an uncertain US
economy.
Despite the weak economic conditions,
both the VTech and AT&T brands
performed well and we continued
to increase our market share,
maintaining the number one
position in the US cordless phone
market. During the financial year,
VTech DECT 6.0 models for
The Bluetooth feature
of our AT&T DECT 6.0
products is highly
regarded by consumers.
The enterprise phones for
small and medium sized
business allow VTech to enter
the commercial sector.
Our commitment is
to provide consumers
and small and medium
sized enterprises with
products that offer
excellent quality and
performance.