Growth Opportunities Drive Product Strategy
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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
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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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