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In TEL products, the businesses in the US and Asia Pacific
posted good performances, partially offsetting the weakness in
Europe. In residential phones, the Group maintained its number
one position in the US3 and grew its share further as the
market continued to consolidate. Sales of commercial phones
and other telecommunication products continued to rise.
Among these, baby monitors and the cordless business phone
system, SynJ®, were the best performers. VTech also started
shipping ErisStation™, its first conference phone with wireless
microphones, to customers in the US and Europe in the
fourth quarter of the financial year. In the financial year 2014,
commercial phones and other telecommunication products
represented about 14% of total TEL products revenue, against
approximately 12% in the financial year 2013.
VTech CMS registered 7.2% revenue growth in the financial
year 2014, once again outperforming the global EMS market
and marking the 12th consecutive year of growth. Its strong
reputation and expertise in a number of product categories
enabled it to add new customers and expand geographically,
resulting in top-line growth in all regions.
Our Strategies
VTech’s proven strategy centres on four growth drivers: product
innovation, gains in market share, geographic expansion and
operational excellence.
Product Innovation has given the Group leadership in core
product categories, while acting as the driver for growth in the
new product areas.
VTech’s ELPs have benefited from tremendous growth in areas
beyond that of core learning and the Group will build on this
momentum by introducing new product ranges. The infant-
toddler vehicles line Go! Go! Smart Wheels and its playsets
were strong performers in the financial year 2014. Riding on
their success, the Group will increase its presence in the playset
arena with the launch of Go! Go! Smart Animals™ in the US and
Europe. More vehicles and playsets, meanwhile, will be added
to the Go! Go! Smart Wheels line. The Switch & Go Dinos® range
of vehicles for the preschool segment will expand further with
the introduction of Switch & Go Dinos Turbo, adding nine new
models to the range.
3 Source: MarketWise Consumer Insights, LLC
VTech will also continue to broaden its learning products
portfolio. More than 100 new standalone products targeting
infants, toddlers, preschoolers and grade-schoolers, will be
introduced globally this calendar year.
In platform products, VTech continues to innovate to capture
the latest trends. Kidizoom® Smart Watch, the world’s first
children’s smartwatch with a camera, will hit the shelves in
both the US and Europe this summer. To maintain momentum
in children’s tablets, the Group will upgrade InnoTab with new
versions, including InnoTab Max. With a 7” LCD screen and a
child-proof design, InnoTab Max has an upgraded processor
for an enhanced experience, backed by a rich and expert-
endorsed library of educational software titles.
For TEL products, growth will be driven by commercial phones
and other telecommunication products, which will see new
offerings across the spectrum during the financial year 2015.
Among them, a new range of small to medium sized business
(SMB) phones will be launched under the VTech brand. This
will include a new conference phone model with wireless
microphones, SIP (Session Initiation Protocol) phones and
a 4-line, SIP-based telephone system catering to the needs
of small businesses. VTech’s range of baby monitors will be
enhanced by the introduction of more video and audio models.
For connected home™ devices, in addition to Wi-Fi video
monitors, a new family of home monitoring devices based on
the DECT ULE (Ultra Low Energy) standard will be launched in
the second half of the financial year 2015.
In residential phones, the Group continues to develop products
with new styling and features. The DECT platform has been re-
engineered to make it more cost-competitive. This supports the
strategy to revitalise the European TEL products business and
strengthen VTech’s leadership position in the US. The Group
will also introduce new CAT-iq handsets in Europe offering
affordable, high-definition voice quality supporting multiple
lines during the financial year 2015.
VTech’s proven strategy centres on four
growth drivers: product innovation,
gains in market share, geographic
expansion and operational excellence.
4 VTech Holdings Limited Annual Report 2014
Letter to Shareholders