Growth Opportunities Drive Product Strategy

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1 Growth Opportunities Drive Product Strategy Junien Labrousse EVP Products Logitech Analyst & Investor Day New York November 11, 2009

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Transcript of Growth Opportunities Drive Product Strategy

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Growth Opportunities DriveProduct Strategy

Junien LabrousseEVP Products

Logitech Analyst & Investor DayNew York – November 11, 2009

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Forward-Looking Statements

This presentation contains forward-looking statements, including the statements regardingstrategies for the PC, TV and Smartphone platforms and for Enterprise Video-Calling,associated product plans and growth opportunities, and expected revenue performance ofLifeSize for CY 2009 and CY 2010

These forward-looking statements involve risks and uncertainties that could cause Logitech’sactual performance to differ materially from that anticipated in these forward-lookingstatements.

Factors that could cause actual results to differ materially include: our failure to execute upon our strategic plans and opportunities competition from established or new competitors, particularly in devices for the TV and

Smartphone platforms and in the Enterprise Video-Calling industry, many of which have greaterfinancial, technical, sales, marketing and other resources than we have

the ability of LifeSize to achieve revenue expectations, which depends on factors such as theintegration with Logitech, competition in the video conferencing and communications industry,including from companies with greater resources, installed base and name recognition, and therate of adoption of video communications in enterprises

the rate of consumer adoption of devices for the TV and Smartphone platforms our product introductions and marketing activities not resulting in the platform or product

category growth we expect, or when we expect it More information about these and other factors impacting Logitech’s business and prospects

is contained in Logitech’s periodic filings with the Securities and Exchange Commission,including its Annual Report on Form 10-K for the year ending March 31, 2009 and subsequentQuarterly Reports on Form 10-Q available at www.sec.gov. Logitech does not undertake toupdate any forward-looking statements, which speak as of their respective dates.

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Focusing on the Four Screens

Smartphone Screen

Enterprise Video-calling Screen

TV Screen

Interfaces(input, navigation,

audio, video)– all customized to

screen usagemodels

PC Screen

Capture market transitions in 4 connected device screens

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PC Screen Strategy

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PC Screen Strategy

Expand Unifying technology acrosscomputer peripherals consistentwith our brand promise

Innovate, solving for more portable“on the go” technology, i.e. laptopsand netbooks

Simplify the product portfolio in corecategories

Embrace unstructuredenvironments and cloud-basedapplications as new usage context

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Opportunities in Installed Baseand in Growing Platforms

Replace and UpgradeOpportunities

IncrementalOpportunities

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Netbooks Supplement Desktopsand Notebooks Usage

DesktopOnly

39%

Notebook &Desktop

39%

4%

2%1%

<1%

Usage ofComputers byForm Factor

NotebookOnly

15%

Source: Socratic Web Survey, 2009

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Notebook Attach Rates Remain Strong

Source: Logitech survey results, 2009

71%

41%

40%

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Netbook Form Factors CreateOpportunity for Accessories

New form factor, but painpoints stay the same

Continue to improve user experience for this new growingplatform, including innovative mice and headsets

Ultra-compact shape

Reduced width makes lap use difficult

Packed components tend to overheat

Compact touchpad & keyboard

Hard to control mouse cursor

Challenging text input experience

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We Continue to Innovate…

Portability

Nano receiversfor mobilenotebook users

Anywhere

Darkfield LaserTechnology toperform on anysurface Convenience

Unifying technology frees upvaluable USB ports withfreedom to move from placeto place without having toplug, unplug and keep trackof the receivers

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Huge Upgrade Market for WebcamsLogitech is the Preferred Path

0

20

40

60

80

100%

Aug-07 Apr-08 Dec-08 Aug-09

Other

Logitech

Share of high-end is growing High-end Logitech webcams receive topconsumer ratingsLogitech share for $50+

webcam market in U.S.

Source: NPD

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Leader in Webcam Image Quality

Skype in Spring 2008

Windows Live

Messenger in Fall 2008

Google in Spring 2009

Logitech Vid in Summer

2009

Yahoo in Fall 2009

$99$99$99

$99$99$99

$79$79$79

High quality, VGA30 already the standard And high-end Logitechwebcams are HD & 720p

capable

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Tap into The Fashion Wave

Personalization and customization provide incremental revenue opportunity

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Designing for China

Long-lasting battery life

Sturdy design

Compact and space-saving models

Spill-resistant designs

Extended range 2.4Ghz for PC control on TVs

Value price points

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TV Screen Strategy

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TV Screen Strategy

Establish Harmony as the standardfor device control and contentnavigation

Accelerate solutions to scale theconnected TV market

Develop and proliferate uniqueinterface experiences for theconnected TV

Explore 3D gesture-basednavigation

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Significant Opportunity for Remotesat Lower Price Points

0.0

1.0

2.0

3.0

4.0

5.0

AMR (NPD) EMEA (Gfk EU3)FY0

9U

nit

Vo

lum

e(M

illi

on

s)

Basic (<$50/30€) Advanced (>$50/30€)

Sources:NPD POS report for AMR May 2009; Gfk EU3 POS report Feb 2009

Current solutionshave poor setup

and unsatisfactoryperformance

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Discover Share

Harmony Everywhere will enable content engagement

One source for content Simplified navigation Recommendations Search Lists Reviews, meta-data &

rankings

One touch control from anyinterface Content selection drives

HES control Synchronized smart state Discover or share from any

interface

Receive feeds about whatyour friends are watching IM or Tweet with friendsFind others with similar HE

interestsShare your reviews, rankings

and comments

Access

Harmony Everywhere:Potential Long-term Growth Driver for Remotes

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Video-Calling in the Living Room:The Not-So-Distant Future

Internet TV

Installed base of VoIPusers on PCs

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Smartphone ScreenStrategy

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Smartphone Screen Strategy:Next Generation Computing Platform

Leverage smartphoneas the next generationcomputing platform

Drive play in mobileperipherals

Leverage Logitechexpertise for mobileapplications

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Smartphone Market Growth:Expect Continued Acceleration

Source: Gartner March 2009

Smartphone unit share expected to be greater thannotebook & netbook market by 2010!

Technological advances and the convenience of theplatform make it attractive to consumers

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Open Ecosystems Provide MoreGrowth Opportunities

Source: Forrester Research, The "Smartphone" Is Dead: Long Live Smart Phones And Smart Gadgets, May 2009

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Enterprise Video-Calling Strategy

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Enterprise Video-Calling Strategy

Accelerate adoption of videocommunication

Acquired SightSpeed in 2008,technology foundation for Vid

Create seamless videocommunication solutions in the livingroom, at the office, on the go and inthe meeting room

Develop partnerships to build anopen video communication eco-system

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SightSpeed Enables High-Quality Video-Calling for Consumers and Business

9-way multi-party calling

Call recording

Secure, centralizedadministrative console

SightSpeed BusinessLogitech Vid Dell Video Chat

Custom-designed UI forDell

Several premium featuresavailable to Dell customers

Shipping on Dell consumerlaptops and netbooksworld-wide

Designed for non-techsavvy consumers

Uses premium codecs forbest performance

Bundled with all Logitechwebcams

4.1 million users

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Frontiers Between B2C andB2B Blurring

35% of users say they use Skype forbusiness

20% of Skype users make Skype video-callsfor business purposes †

95% say they are saving money *

70% say they are using it while traveling onbusiness *

80% say they are seeing increasedproductivity *

Skype is a great example iPhone Popular for Business Use

* Source: Skype user study of 4,000 users in the US, UK and China conducted in March 2008† Source: Results from a December 2008 online survey of 2452 active Skype users in the US and UK

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LifeSize:The Natural Evolution of ourVideo-Calling Strategy

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LifeSize Overview

Craig MalloyCo-founder and CEO, LifeSize

Logitech Analyst & Investor DayNew York – November 11, 2009

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Company Overview

Pioneered HD Video Communications

Co-founded in March 2003

Craig Malloy, CEO (and co-inventor of Polycom ViewStation)

76 patents and pending patent applications

Fastest growing company in video communications industry

~$90M revenue in 2009 and expected CY10 revenue +40-60%

Over 26k units shipped to over 9,000 customers in 80 countries

Technology leadership

Price/performance leadership from inception

Architectural advantage over competition

Broad and deep intellectual property base

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Large, Growing MarketVideoconferencing Rapidly Emerging in Enterprise Market

0

1

2

3

$4B

2008

$2.0B

2009E

$2.1B

2010P

$2.4B

2011P

$3.0B

2012P

$3.6B

Videoconferencing Endpoints and Infrastructure

Source: Wainhouse (2009)

20% CAGR

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Macro Drivers Point toSignificant Growth

EconomicClimate

BusinessDrivers

CompellingUser Experience

Travel has becomedifficult,inconvenient, andtime consuming

Heightened focus onROI and hard costsavings

Growing awarenessof climate changeand carbon footprint

Globalization

Competitiveenvironment requiresfaster time-to-market

Increased demand forricher collaboration

High definition bringsrealism of experience

Network capacity tohandle 1Mbps+ HDvideo calls

Dramaticallyimprovedprice/performance

(HD <$2,500/site)

Business Video Communications

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Multiple Companies ServicingBusiness Video-Calling Market

SOURCE: AMI, Wainhouse, IDC, Polycom and Tandberg financials

Enterprise desktopvideo solutions

Room-based video-conferencingsystems

High-endtelepresenceenterprise solutions

Video-calling,collaborationsolutions for SMB

Business video-calling market (incl. end points, infrastructure, and services)

Key playersPrice/unit

$100K+

$10K+

$200+

Variessignificantly

~$2.5BSolutions

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LifeSize Share and Revenue Growth Drivenby Strong Price/Performance Solutions

0

20

40

60

80

$100M

0

2

4

6

8%

2007 2008 2009E

Revenue

Total marketshare

Room endpointsshare

LifeSize is now #3 provider of room-based video conferencing systems

Serves over 9,000 customers in largeenterprises, small-to-mediumbusinesses and public healthcare,education and governmentorganizations in more than 80countries

Over the last three years, LifeSizerevenue more than tripled

Share of total video conferencingmarket more than doubled since 2007

Share of room-based systems,LifeSize’s core market, more thantripled in the last 3 years

Room to expand share beyondtoday’s relatively modest levels

Revenue Market Share

Source: LifeSize estimates, Wainhouse (2009)

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0.0

$2.5B

SMB Market Industry Drivers LifeSize Drivers

SMB Market Remains VirtuallyUntapped

Broadbandpenetration

Encodingtechnologies

Consumer adoptionof video-calling

Enterprise market today

Accessible pricepoints for SMB

Ease of use

HD quality systems

Low cost of install

Outside the firewalloperability

SMB marketis primed

for adoption

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LifeSize Value Proposition

Superior Quality ofExperience

Life-size, immersive HD experience inALL solutions

1080p30, 720p60 and dual 720p30

UniqueFlexibility Unmatched Price

PerformanceEnable the HD experienceANYWHERE

Minimize bandwidth qualitytrade-offs

New infrastructure

Interoperability with Skype

Enable the HD experienceEVERYWHERE

HD solutions <$2.5K(LifeSize Passport)

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LifeSize Product & Service Offerings

1 1. Highest price-performance Video Endpoints

2. Management &Control

5. Assurance Services

3. Video Infrastructure4. Security, NAT/FW

Traversal

Conference seriesTeam seriesExpress series

Express™from $6K

Room™from $16K

Conference™from $50K+

Team MP™from $10K

Room seriesPassport

Passport™from $2.5K

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Customers Across Multiple Sectors

FinanceTechnology

Health Care Gov’t/DefenseRetail/ Consumer

Manufacturing/Industrial

Education

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Strengthened R&D Capabilities

In 1998, entered the webcambusiness - became a mainstayof computer users

Leader in high-end, high-performance webcams

Worked with partners such asYahoo!®, MSN®, AOL® andSkype™ to integrate videowith popular Internetcommunications applications

Scalable SIP capabilitiesthrough SightSpeed network

Innovator in consumervideo-calling

Innovator in HDbusiness video communications

76 patents accumulated over thelast 6 years

Deep R&D expertise

First to introduce HD video-conferencing almost 4 years ago

Provides leading performancevideoconferencing systems at anyprice, any bit rate

Features smallest architecturalfootprint design in industry

3rd generation design extends lead

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The Value of Partnerships

OEMs

UC/Videoconferencing providers Video-calling platforms

Technology

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Logitech and LifeSize Combination EnablingVideo-Calling Across Platforms

Disruptive offering

HD product offering

Performance pricing

SightSpeed hosted service

Integrating PCvideo-calling withthe meeting room

Bringing video-calling into the living

room

Large and growingvideo-calling

user base- in the office, at home

and on the go

Connected TVopportunity

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