LOGI

Logitech International S.A. (LOGI)

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Logitech International SA (LOGI)

Company Conference Presentation

November 14, 2012 10:45 a.m. ET

Executives

Guerrino De Luca – Chairman & CEO

Analysts

Andrew Humphrey – Morgan Stanley

Presentation

Andrew Humphrey – Morgan Stanley

Hello everyone. Very pleased to welcome Guerrino De Luca, Chairman and CEO of Logitech to the stage. Before we dive into Q&A, I want to conduct a little experiment if that’s okay. Can you – I’ve seen a lot of iPads, can you raise your hand if you’re taking notes from the conference on an iPad or other tablets of any description. Francois, I don’t think Francois is taking any notes.

Okay, so we maybe got 20 in the room and if you all – can you keep your hand up if you’re using a keyboard of some kind to do that? Okay, one, two, three, okay, so 15% thank you. And final question is that keyboard a Logitech keyboard? One, okay, 30% no, 60% market share and 15% touch rate.

Everybody else you should buy an iPad at this time and hopefully connect with this beautiful keyboard that exist in white and black in the perfect Apple’s position, just the white version, sales 40 to 60 in white. Gives you maybe of what Apple is serving today.

Question-and-Answer Session

Next question who is using a mouse with the iPad.

Guerrino De Luca

You guys buy these are not profitable but with everything else it is.

Andrew Humphrey – Morgan Stanley

So how is the launch of the iPad keyboard seen? Is that sort of a touch rate consistent with your experience that you’re seeing across the business or?

Guerrino De Luca

Well, we – the launch has been great, the product has been out since April. It’s been available in the Apple Stores probably not for three months or so, three, four months before that was available in apple.com is doing wonderfully in the Apple anecdotally you go to an Apple Store, you buy an iPad, if you utter the word keyboard, they will just tell you that this is the one you should get.

Before anybody tells anything that means before Apple makes one of these, right. Also the usage of keyboard on tablet computing is much higher than what this product would indicate. So it’s the single largest keyboard used on iPads today is not Logitech, so it’s not any other third-party, is the Apple uses this keyboard, which is not made for the iPad that is used with the iPad. And we expect that for tablets in general on all the Apple at long steadying keyboards will play a significant role as that category develops well beyond the advert.

We’re seeing kind of the very unusual situation in the tablet market which is there is a single player dominating it and the single player is highly vertically integrated and totally closed. This is not the way computing platform have developed in the past, then I don’t expect this is the way computing platform will develop in the future. You already see in the smartphone which is a completely different dynamic, its more influenced by carriers, which is not the case for tablet computing.

And even there Apple has lost its market share lead through Android devices and I believe that even more dramatically this has happened in tablets over time, not because Apple is not good, Apple is fantastic, they will always have the best product, but it doesn’t make necessarily for the highest market share.

Andrew Humphrey – Morgan Stanley

So the product, the Ultrathin Keyboard anyway launched in April, you stall it looking in the Apple Online Store later in the year. How much of an extra bump has that been in terms of the extra exposure to that channel’s model?

Guerrino De Luca

Well the product has accelerated dramatically in the Apple Store. It’s also available outside the Apple Store in more traditional retailers. So obviously the Apple Store component is high. This is most natural Apple product, so it is current year best-selling retail product which is kind of another first for Logitech. We never had a retail product that’s number one which was linked to a non-Wintel platform the fact that the scene Apple is particularly in neutral.

We’re thrilled with it. There is other product that we sell around the lab from that do invade while that are kind of somewhat channeled by this, the folio of the portfolio is also doing very well in the Apple Store and elsewhere and there is more to come. So this is a portion of our strategy to broaden our presence well beyond this traditional Wintel world into the sort of mobile screens where in particularly the tablet work.

Andrew Humphrey – Morgan Stanley

Do you think there is an advantage I guess with best formed practice specifically the iPad 3 was the same as the iPad 2 in terms of hardware design, you had time to work…

Guerrino De Luca

Well I’ll alleviate iPad 4 is the same as the iPad 3 which is a good – it gives us a breathing room and space to sell more of it. As you know the cycles will accelerate. And as I said before, the form bidding class accessory is a subset of the accessories that we are considering and Bluetooth is the next USB in general for especially for mobile platforms and so that gives us a lot of other opportunities on the iPad as well as other tablets or laptops.

Read the rest of this transcript for free on seekingalpha.com