LOGI

Logitech International S.A. (LOGI)

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Logitech International SA (LOGI)

Morgan Stanley 2013 Technology, Media & Telecom Conference Transcript

February 25, 2013 4:20 PM ET

Executives

Erik Bardman - SVP, Finance and CFO

Analysts

Presentation

Unidentified Analyst

(Inaudible) finally, is the question, right. So hello everyone, so we have Logitech now. So where do we start actually, I mean the Windows 8, I think is a bit confusing to me. It looks like we have great cycle, it's not happening so quickly. And that's not really helping Surface RT ships with big phones, it's on keyboards, which in a way is not good for you, but in another way good because you know, it shows that, you know if you want to use --

Erik Bardman

Right.

Unidentified Analyst

-- Windows 8 in a good way you need a keyboard. I don't know about you about the Surface RT, I sold it on eBay because that was -- I got a little bit confused with it.

Erik Bardman

Right.

Unidentified Analyst

So I think it's really a question of some people want a keyboard, some people don't want a keyboard. And it's quite difficult to get what people are going to do. If you want to use Excel, you need one. If you don't use Excel, you don't need one. So maybe you're going to assume -- I don't know my mother's because of (Inaudible) I don't have a keyboard.

Erik Bardman

We've got to get you one.

Unidentified Analyst

Yeah, I'd want one. So you know, how is the market research from your side trying to get where the market is going, in three years?

Erik Bardman

Yeah.

Unidentified Analyst

Because I don't know.

Erik Bardman

So a couple of things I would say is that what we've found so far with keyboards for the tablet, right, specifically for the iPad is is that, when you get the right combination and we really think we have that in the Ultrathin. So fantastic battery life, really thin form-factor. But what's equally important is, it looks like it belongs with the iPad. One of things we actually use in our online marketing, which we call The other half of the iPad, because what it does is that it really puts you in a position that almost anything that you want to do and you can do it from that perspective, whether it be text input, whatever it might be.

And I think to your other point, your question about you talked about Windows 8, and what's going on there, this is it, look everything you can see from the industry, Windows 8 has a very slow adoption cycle right now. But it's actually break it into two buckets, let's say enterprise and let's say consumer.

On the enterprise cycle side, it's way too early to tell, because the enterprise adopts it very slowly. I mean I think the stat I saw recently, almost 40% of the worldwide PCs running Windows today are still running XP. That's the version before Vista. So that cycle moves very very slowly on the enterprise side.

On the consumer side, I think the consumer right now, might be a little bit confused about what Windows 8 is, how different it is, what's the Surface RT, what does it do for me.

Unidentified Analyst

(Inaudible) you need it read it on the Windows as well [aren't you -- the first thing?]

Erik Bardman

Oh yeah, not they -- Windows, Microsoft has been aggressive about creating one platform that works on the smartphone, on the tablet and on the PC, and no one's quite done that before and there's a lot of things you've got to do. But I think the piece I'd pull out of what you said there that's important for us, in our research is is that the more people see that -- you can have portable and you have keyboards and covers and things that make your experience better, that's generally good for us from that perspective, because we think we absolutely make the best product. Our brand resonates really well in the space. So whether it's for one type of tablet or another we see that as net opportunity.

Unidentified Analyst

So how does it's working, the product development cycle, because you know there will surely be a new iPad this year, maybe the dimensions of it could be different.

Erik Bardman

Right, right.

Unidentified Analyst

Do they tell you in advance and you can have your products ready on its launch or they don't tell you at all?

Erik Bardman

Apple doesn't tell --

Unidentified Analyst

I'm not asking if you know, I'm just saying in general, how does it work?

Erik Bardman

I mean in general Apple is very secretive about what they develop, right and --

Unidentified Analyst

Even to you?

Erik Bardman

With anyone, really. But I would say this is it, if you have good market intelligence and you really understand you have a sense of what's going to happen from that perspective. And what you do is you actually build that flexibility in. So one of the things that we've done, and this is one of the things that Bracken has really driven in the organization since he's come on board, is we've changed how we do some of our product development, particularly around the tablet, right.

In terms of being able to develop faster, we still have to get faster, we're not as fast as we want to be. But for example the iPad Mini keyboard that we just launched two weeks ago.

Unidentified Analyst

Okay.

Erik Bardman

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