Vtech 2011 Annual Report Download - page 6

4 VTech Holdings Ltd Annual Report 2011
No. 1 Global Manufacturer of Cordless Phones
MZA Ltd, a UK based telecommunications and IT analyst firm, confirmed that VTech
was the number one player in the global consumer cordless telephony market in
the calendar year 2009, with 27% of market share*.
The small to medium sized business (SMB) phones offer
the Group tremendous opportunity for growth. We have
restructured our sales team to better align ourselves
with distributors and value added resellers. At the same
time, we will continue to launch new SMB products
into the market. In the hospitality area, we have signed
agreements with a number of leading hotel chains to
supply corded and cordless phone systems for use in
their hotels.
The outlook for our ELPs in North America continues to
be positive. Our two new platform products, MobiGo
and V.Reader, are selling well and we expect good
contribution from both hardware and software sales. They
will be joined by InnoTab™, which will hit the shelves in
Autumn. InnoTab is a multi-function educational tablet
for children aged between four and nine years old. It
combines interactive and animated reading, learning
games, creative activities and a rich collection of internet
downloadable applications.
Growth momentum for standalone products is
expected to continue. In addition to new products to
the existing infant and pre-school lines, a new line of
interactive vehicles will be introduced to the infant
range. Our grade school line of electronic learning aids
will also be revamped with two new laptops, both with
colour displays.
The global EMS market is forecast to register growth in
the calendar year 2011 and we are confident that our
CMS will again outperform the market. We foresee solid
demand from all key product categories in North America,
including professional audio equipment, commercial
solid-state lighting, communications and industrial
products. Over the years we have built a solid base of
top tier customers in their industries. As their markets
continue to expand, sustainable growth is expected for
CMS. In addition, our customer focused approach, which
ensures flexible and high quality service, has raised our
profile. This has allowed us to sign up new accounts on a
regular basis, adding to growth.
Since the beginning of the financial year 2012, CMS
has started manufacturing FDA (Food and Drug
Administration) approved products for customers
in the US. This underscores our ability in producing
sophisticated products in the medical equipment area.
Europe
The strong momentum behind our TEL products in
Europe will continue in the financial year 2012, as we
expect to gain more orders from existing customers while
acquiring new ones.
Again, our R&D capability will give us an edge in
both our existing and new product lines. We have
developed proprietary technologies that allow digital
video transmission up to nine frames per second over
the Digital Enhanced Cordless Telecommunications
(DECT) platform. This will be initially applied to our
baby monitors, offering compelling performance at a
breakthrough price. The products will be shipped to our
customers this Summer. We are also developing a full
range of VoIP corded and cordless phones to address the
market for terminals connected to PABX (public access
branch exchange) systems. In addition, sales of integrated
access devices (IADs) will increase as we continue to
expand our customer base.
With the full launch of MobiGo and Storio™ (the
product name for V.Reader in Europe) in all of our key
European markets, platform products will make a higher
contribution to our ELP revenue in Europe in the financial
year 2012. The strong momentum behind standalone
products will continue, as we launch a new generation of
Kidizoom® Cameras, a product line that has sold very well
in Europe. Our Kidi line of products will be augmented
by the introduction of the KidiMiniz series and other
new items. Furthermore, Eastern Europe has been a
strong contributor to growth, and the trend is expected
to continue.
Letter to Shareholders
* The Global Telecommunications Market Report 2010 Edition published by MZA Ltd