Logitech International S.A. (LOGI)
NASDAQ OMX 27th Investor Program
December 7, 2011 09:45 AM ET
Erik Bardman - Chief Financial Officer
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So there is really two ways I want to you a framework in terms of thinking about where Logitech is and where do we see growth moving forward. The first is when we think about our market segments as business there is really three primary market segments for us, what we call consumer developed markets, these would be markets like the US, UK, Germany, France, Australia, Japan and this is particularly as you look at some of core products and I will talk about that in a second, but this is largest part of our market segmentation today. The second one would be consumer emerging and is how we define consumer emerging would be market such as China, Russia, Brazil, India some places in eastern Europe, markets where we are not only present today but where we are seeing good opportunities for growth and when you are going to see us invest and focus going forward.
And then the third one is what we broadly call business. There is actually two pieces to this, there is LifeSize the acquisition that we made almost exactly two years ago in to video conferencing and then also Logitech for business which is a small, also a start up within Logitech where we have taken the dedicated focus team to locate ways in which we can take our existing Productivity Tools things mice, keyboards, webcams and bring them more effectively to enterprise. This is also part of unified communications as more and more companies look to connect their employees streamlessly[ph]. So as we think about our market segments, we really break into those three pieces.
The second way in which we like to think about the business overall is really across, you can either call them streams or almost like platforms. And for us it is really four, first and the foremost is the PC, this is the Desktop, the Laptop, the Netbook, which has been the core of our business traditionally, but also we see differentiated growth going forward, whether it be in consumer developed, consumer emerging, or business when we think about our different market segments.
The second one would be around the medium rim, and this is everything related to LifeSize as well as video communication more broadly in terms of how people are connecting under unified communications particularly in the business segment.
The third platform is going to be anything mobility, so this is going to be tablets, smart phones, ways in which we can bring products to bear[ph] they are going advantage of what consumers and businesses want to do there and the way in which they want to use those tools.
And then the final one is, we use the television to depict this, but this is the consumer’s home, so what are the activities, whether it be on and around the televisions, this could be digital music, this could Harmony remote controls, opportunities for us as we think about our products and then differentiate it across the market segments. So that is to give you a framework in terms of how we think about market segments, how you things about streams or platforms.
And then this last slide, this is my last slide here, it is just to sort of summarize, when we look across those, where the intersections of some opportunities that we are focused on. I won’t read every part of this slide here, but it just brings the life a little bit, when we talk about for example music as an opportunity. We see that first and foremost as part of what we would do in consumer developed markets, as well as some emerging opportunities in places like China and a few others or alternatively as we look at growing consumer developed markets particularly in the PC, unique opportunities we see there as we think there is an improved opportunity for us to go after improving our value proposition and up sell, specifically as we go after products designs, specifically for the Mac and then also in terms of how we are thinking about some of our traditional businesses like webcams and PC speakers.
And as I mentioned earlier, when you look at the business segment, there is really two key pieces for us there, it is the ways in which we can bring video conferencing to more and more places through LifeSize and then the way in which we can bring those productivity tools and products that we built well for a very long time to the enterprise more effectively. So this is just a way to sort of bring this two together.
Within the strategy Erik, you talked about whether you look at product down or from the market per se, there is one thing which you have highlighted recently also, at the results, at your annual investor day, you have highlighted product portfolio as being a key focus area for you, so if we kind of overlay the strategy in terms of where we are with your current product portfolio, where do you see the priority is? What are the gaps in product portfolio? How do you plan to address that? And then finally, on product portfolios, when you are addressing these issues, does that have any kind of margin implications or is it more about reallocation of resources and focus?