Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  

Logitech International (NASDAQ:LOGI)

Morgan Stanley Technology, Media and Telecoms Conference

November 16, 2011, 05:15 a.m. ET

Executives

Guerrino De Luca - Chairman, Acting President and CEO

Analyst

Ashish Sinha - Morgan Stanley

Ashish Sinha - Morgan Stanley

Good afternoon, ladies and gentlemen, thanks for attending the session. It's my pleasure to welcome Guerrino De Luca, Acting CEO of Logitech. Thanks for being here Guerrino.

Guerrino De Luca

Thank you.

Ashish Sinha - Morgan Stanley

Very quickly just wanted to set the tone for the chat, it's been a few months now since you have been hands-on on the business again, after a few years of the hands-off, if I can use that word. May be we can just start with a high level view of coming back to the business. where do you see the biggest challenges and opportunities for Logitech and how do you view things the way they are maybe as we go on we can touch on each of these points.

Guerrino De Luca

Yes, well, I think Logitech has always been a great product company, and I think that over the course of the last two or three years, that part of the business which is essential has seen, I wouldn’t say down played but certainly is not as prominent, was not as prominent as I think it should be in a company that makes consumer products fundamentally that you have to want to buy. And this is particularly true in certain areas; we have done a wonderful job in entry level product across the portfolio. We have not done a good enough jobs in an area that is essential for our profitability and health which is sell up or up sell proposition in certain categories. What do I mean by that is that, when a consumer is (inaudible) to consider a mouse or a keyboard or a web camera, very classical loves their product? We have given this consumer less reasons to buy up instead of buying an entry level products, and that of course, has impact on a price. It's a product portfolio challenge that we can fix. It's completely in our control and in fact we are progressively fixing it and in certain categories we are already there.

The proof that this is really important is that in categories where we do have a strong up sell proposition, one being keyboards which some people consider maybe the most boring of all categories, who wants a keyboard these days, right. It's actually doing very well, because we have a great up sell from the basic keyboard to illuminated keyboard solar powered keyboard and consumer and consumers buy those. But more in general I think that the issues that we have had in the past two or three years, is to believe what the naysayers were saying, is to believe that the potential for growth around the PC platform in the established consumer developed market was gone. It is not. And it is not because I’m blind and I don’t see the growth of the iPads and tablets and I don’t see the declining or very modest growth of the PC platform, but new sales in the PC platform, we see all of that.

But first of all there is just way too many PCs out there to be discounted, I don’t know of anybody that bought an iPad who threw away his laptop, in fact the laptop and the PC in general continues to be used in certain circumstances and as the iPad becomes the mobile platform of choice your laptop PC is even more residential and even more friendly to add-ons. So I think that we believed it because everybody was telling as this and it's because it's the simple thing to believe and in fact that was a mistake. In fact I don’t believe it at all, I think that obviously we have tremendous opportunities in emerging markets and around the PC of course, largely underpenetrated but we have solid opportunities across the number of categories in the western world in addition to what we are putting together more intensively which is a focus on PC peripherals in the business market, which is way underpenetrated on our side, and it's an add-on chance.

So, that we have focused on more iffy growth opportunities outside the PC and we forgot the bread and butter or largely forgot the bread and butter and that’s what I’m trying to correct.

Ashish Sinha - Morgan Stanley

Okay. Two things emerging from that, which I think is pretty interesting. First, you said consumers creating up, what is your view in given the current macro in what it meant, how much are consumers willing to spend the extra 20, 30, $50 to create up to the next level, anything kind of postpone their decision. That’s one. The second theme, you talked about is product portfolio, now within the latest categories Logitech has, what is your view coming from a different role. What is your view of where the product portfolio currently stands, what are the gaps and what do you think you can do to achieve that, what’s the timeframe and how that’s everything fit together?

Guerrino De Luca

Okay. On the trade off kind of dynamic, obviously, the word is gloom and doom, and I think we haven’t even seen the worst of it. It's obviously in the west. What I know in this we’re intruding the past that it's true today, is that they will hire product categories that are impacted more dramatically by concerns by the consumer than others.

We are not here planning to sell products to people that can’t afford to put a meal together for that kind, we never did and we never will. But we are talking about the generic concern in the consumer and that concern applies to products that need to be debated at home. I used in the past the Check With Your Spouse threshold, a metaphor which means there are some products you have discuss with your husband or wife, should we buy a new TV, should we buy a new car, and more difficult the times are irrespective of the budget of that family, the more inclined people are to postpone.

None of our progress are very few of our products get into that. Our products are imposed by either you want them or you don’t. They don’t impact their budget, if you can’t afford to buy a mouse, you will not buy a mouse. This is no question about it. You don’t have to, you don’t need a mouse to survive, you don’t need a keyboard to survive these other things they are more important life than those. But if you are happen to be in front of a shelve and have decided for a mysterious reason that you want a web cam or a mouse, then it's very easy for you to afford the extra $20 for a mid range mouse if it's worth it. And the value of the worth is defined by a combination of real and proceed benefits, that’s one product that make you feel much more cool, if you bring that home than others. These are dynamics that exists in the consumer market in general and apply to Logitech in particular.

So, I do believe that the economic cycle or secular decline of the western world has much less impact on our portfolio that we would have another consumer product. I’m not saying that it's a good thing; I’m saying that there is some impact of course, but is not as dramatic.

In terms of the assessment of the portfolio, I will say that certain parts of the portfolio I mentioned keyboard is actually doing well today. Certain parts need revamping. More typically I’d say the combination of that remote controls and mice to very important categories for different reasons. They both suffer from that phenomenally strong entry level, and either oldish or not compelling enough mid range. We look correctly, this is again entirely in our control it's comes with a product development cycles, we have introduced products already this quarter; we will introduce products next quarter and quarter after next. So, this is not like a one off thing. One day you wake up and everything is hunky dory. First of all it will never be hunky dory, always things that we need to do, but I’d say that over the course, progressively over the course of the next 6 to 12 months you will see a lot of point products to come up particularly in mice and remote controls, but also in web cams and speakers that will strengthen the line.

Just a commentary on speakers, PC speakers and PC web cams. The PC speaker market is kind of way more resilient way more resilient than even I thought it was. See I was even myself thinking of doom and gloom. I believe that music is migrating away from the PC in more mobile devices, but the resilience of music on the PC is amazing. In the last quarter we actually grew our PC speaker, so I think that that’s a lesson learned. It's aligned that it's very broad line and very I think we have too many SKUs in that line. So, there you will see more of the trimming and maybe a couple of new products, especially in the mid range than anything else.

The web cam is a different game, the web cam is substantially, the web cam business substantially impacted by the embedding of web cams in laptops, everybody has web cam in their laptops. And when it comes to the quality that web cam provides for many consumers, is actually okay. Amazingly enough, it is not okay for business application, that’s a different chapter let’s stay with the consumer. So, what we have done over the last couple of years is to increasingly focus on higher quality video. HD and we have first the camera that’s first HD and stuff like that. That’s good, but again if quality is not the primary concern of the consumer, buying a quality camera is not a primary need or perceived need.

What we are doing in web cams is increasingly focusing on things that you cannot do with an embedded web cam. So, they have less to do with quality video and more to do with different applications. So, you will see us coming up with web cam bought for the PC that actually do something different than what can be or then just a better quality of your embedded web cam.

So, there is a different points in the portfolio that we are focusing on. But as I’ve mentioned video and particularly business in video, and other thing that we are doing which is just for us to take is increasingly focus our portfolio also on the business market. And I’m talking about the PC portfolio, we have presence in the business market for LifeSize and I’m sure we will touch on that. I’m talking about the classic PC portfolio. We make six times more dollar for installed PC in the consumer market than in the business market, 6x. There must be a reason for 6x, the reason is that we never explicitly address the after-market for PC peripherals in corporate and business.

And the reason we didn’t and I just own that mistake if you want it, is that we thought or I thought that in order to sell for the IT world you have to be a different company. If you design and focus on the consumer how can you actually serve the IT department. Things have changed. The IT department is increasingly driven in their procurement by what the users want, and the users want certain things increasingly, they look at, witness the success or certainly products that were not designed in the enterprising mind like the iPhone, the iPad. And almost the IT departments are swallowing all of these iPhone and iPad everywhere. I believe that’s very true for many of our products.

The second reason why we were reluctant is that we were concerned about what it would take to reach these customers. This is not, we don’t sell a $1 million products and we kept forward the direct sales force to sell to enterprise, God forbid. So, it has to be a child driven effort. And how much time would it take and efforts to recruit the specialized channels that VARs etcetera, that serve the enterprise? That was another overestimated concern because we are signing VARs at the speed of light. These people buy from our distributors, so our distributors are happy. There is more volume that goes through that. And then they target business. And what they have done up until now is they have bought our products from our distributors, without any intend on our side, when customers wanted them. Now we are giving them a little bit more incentive to carry those products more proactively and the general response we had from the VARs that we visited and we have created actually little room that Logitech and so Logitech for business just lead to do that, to cover the B2B opportunity from cradle to grave.

The response they got was like amazing. It was like where within. You are showing that, you don’t have to explain Logitech to these people, you don’t have to explain your profit. They know everything. And so it was the easiest thing that we could have imagined to sign up 10, 10 and 10s of these VARs and as we sign them up, their business with us grows like 2x, 3x very fast. So, that’s the other side where the PC business is vibrant and I think we are just under that.

I said that we are 6 to 1 in terms of dollars per install PC in consumer market and business markets in the west. Will we ever get one to one, I don’t even need that. I think that we can get 3 to 1 and it's going to be a dramatic upside for our business around the PC.

Ashish Sinha - Morgan Stanley

But we are all used to see Logitech products in the office before. With this approach, does it change anything in the channel, who are you displacing from the market?

Guerrino De Luca

We are actually, believe it or not, a number of product, the Logitech products that are in the enterprise today and we are still that factor of 6 to 1 factors that in. So, we are talking 6 to 1 still. They are bought mostly from retail, but many of them are bought through what, we have a system integrator program, and very seamless one OEM program, a number of system integrators actually build custom PCs for their customer in the enterprise. And in order to build those PCs they need mice and keyboards.

And so, we sold them very basic mice and keyboards in a semi-OEM fashion we reported as retail, but it's not retail. So, that’s our primary presence. So, that’s why you see these products but they are not after-market products, they are not add-on accessories, they have just come with the basic PCs that these system integrators make. Those will continue, and at the same time, I do not believe that there is a cannibalization actually and if there, it's very marginal on the fringes. The core is new.

Ashish Sinha - Morgan Stanley

So, what proportion of Logitech’s business today come directly from corporate?

Guerrino De Luca

By giving you a target of like 3 to1, and where it's 6 to 1 today, I’m telling you. And talking about the same category so I’m talking mice, keyboards, web cams and handsets. I’m just considering those categories nothing else is included in these numbers. So, if you look at the current business there in these categories, there is a higher significantly higher proportionate [profit] from business, but we are not discussing mixes at this point.

Ashish Sinha - Morgan Stanley

If you let me move back to the channel, you highlighted a lot of channel inventory issues, various variables or moving parts in different regions. How satisfied are you, I mean they have half way into the December quarter, how satisfied are you with channel of inventory positions in Americas and EMEA, Asia; and how far more do we have to go before, you is not feeling comfortable?

Guerrino De Luca

Let me answer these questions in two ways. The first is, what we say that the time we announced our Q2 results, we said that we are making dramatic and tremendous progress in Europe, we have still more inventory in the channel that we will like to. And I said it will take another one or two quarters to get to a healthy situation there. In the U.S. situation is very different, the channel is very lean, in fact I also said is maybe too mean, and that is driven by the concern of our many of our customers in the U.S. about total inventory that they want to carry into this Christmas season, everybody is very nervous and this is much less to do with our small products, this is to do with the total cash engaged in inventory. I will stick to those comments, I will not give you any color about what’s going on during the quarter, we don’t do that. And I’m not going to change this mind.

Ashish Sinha - Morgan Stanley

You talked about audio being returning to growth after a few quarters of business. So, the last performance I mean, audio came out pretty positive, what is your expectations and you previous commentary about it. What’s really changed, is that a structural change or you still think there is a lot that needs to e done. How should we be thinking about that?

Guerrino De Luca

Okay. One of the (inaudible) there is actually two audio businesses; there is the PC speaker business which is subject to the dynamics that I have discussed in the past and for that business, it's prudent to be way more resilient than even iPod. I was and I’m convinced that music is moving away from the PC. It's just it moves up in glacial pace which is once again a proof that is not because something make a lot of intellectual sense in the long-term it's going to happen tomorrow morning.

People dramatically overestimate the short-term systematically and this a case. So, there is a lot of ongoing opportunity in PC speakers around the PC more (inaudible). But the biggest opportunity in music is outside the PC and our focus is now increasing on what we all digital music three categories. Wearables, meaning earphones and headsets and headphones mostly for smartphones and cell phones. Wireless speakers and docking stations, fundamentally for the iPod, iPhone, but also for Android phones and increasingly those are moving from the docking stations, meaning things that you plug ear device into being in wireless speaker. We recently introduced a beautiful tiny wireless speaker called Logitech Mini Boombox and it's actually one of the example of the cool products that you welcome.

And the third category in digital audio and digital music is cloud speakers, meaning devices that screen music from the various (inaudible) category or from your repertory of music on your PC and your Mac. These three categories combined, the market for these three categories; wearables, and docking and wireless speakers and cloud speakers is about $4 billion today and is expected to grow at 6 or 7 billion in the 2015. It's a very, very growing and changing segment with very fragmented presence and a big transitions in each of those categories, particularly in speakers where docks are going to be very less important and particularly in cloud speakers.

So, we are present in a tiny way in all three. And the biggest non-PC effort of Logitech in fact is going to be around those three categories and I think we can make a good difference there. So, that you will see a few products coming very soon, one just came out another important one will come out shortly and I will be using it that. But increasingly the portfolio will enrich itself with non-PC music speakers across 2012. Music products not only speakers but also wearable’s yes.

Ashish Sinha - Morgan Stanley

Moving back to markets, emerging markets that’s clearly being one area where historically you had limited presence which obviously changed half the China. Could you talk about what’s the opportunity there in terms of other markets and does it require similar investments like you did in China a separate R&D, separate distribution, much more focused towards those market. So, probably these are new instance which come with entering emerging markets because they are already different and you can’t replicate 100% the same business model one country to the other.

Guerrino De Luca

First of all we believe there is template, if you apply to markets as to various as Brazil, China, India and Russia. When we are in a different place it's like probably too naïve. There is a few things that are common, very few but important and we are just exporting them from China and few things that I will make.

And let me speak for a second about China. The biggest probably misconception about Logitech growth in the emerging markets is that it comes at a significant cost, both a significant investment and a significant sacrifice on the margin side. And I’m not talking about only gross margin but total profitability. Surprisingly enough maybe, our China region is the single highest contribution margin region in the world today. How is that? Well we are making some size of investment there, we have a significant industry foot presence, we visit 12,000 stores at least once a week throughout China. We had no other country in which we do like that. It costs us much less to do that.

Also our the product that we sell in China even though on average they are going to be at the lower ASP than probably we sell elsewhere. They are at the high end legend, the tradition of Logitech has been that low areas being mature products are indicators of higher gross margin percent and out of obviously gross margin dollars but gross margin percent. So, no, our growth in emerging market doesn’t come to the detriment of our overall profitability.

Now China is now our number three country. I think we have a go-to-market model there which is top class and I’m very, very confident that the way we go to market, the team we have there and our approach is going to continue to pay off. We are beginning to do something similar in certain areas but not similar in others in India. In China we go wide in terms of increasing the number of cities where we are present and go deep, which means in major cities we present in more point of sales.

In India we are forgiving to go wide situation right now. We do not want to seek the Indian consumer, we want the Indian consumer to get to us. The purchasing power of the Indian average consumer is lower than China and we are not planning to get there. We are planning to remain the premium brand, relatively speaking that we are in China and we are planning to remain that for India and we believe that India is mostly a go deep country in which in big metropolitan areas we will be present in more point of sales with higher consistency.

In Russia very different situation, I do believe that in terms of very long-term potential with Russia that to next India or China, but in the medium term if we have a very strong brand position and a very strong presence, we will increase a go deep coverage in Russia metropolitan areas as well.

Brazil is a different situation altogether. We are very, very small in Brazil, incredibly small, in fact surprisingly small, we are basically ignored Brazil and much of Latin America for a long time. So we are moving our footsteps too early to tell, but Brazil has the combination of potential economy except we are probably secondly only to China in terms of opportunity. China is unbeatable in every dimension. China is also an incredible learning ground for the used marketing in the west. One of the things we are doing in China because the consumer base in China is younger not because the demographics of China are younger, in fact China is an older country than most of the west. But the people interested in technology in China are all young. The generation of the 30 plus has never seen the PC, it's the new generation that is kind of getting into smartphones, PCs and all the technology. So, we market the new generation. We are already using some of things we are learning in China elsewhere. Not only from a product perspective but also an approach and the approach to the marketing to use.

So, China is a in itself a great opportunity, a learning ground for us and we are embracing this notion that maybe 10 or 20 years from China will be the most significant country for us and for many. So, we are doing well there, we are definitely doing well there.

Ashish Sinha - Morgan Stanley

Last question on the traditional PC peripheral market, the core PC peripheral market. Historically you exited underperforming segments on a very selective basis. Is there anything in your portfolio currently you would probably be looking to get out of maybe gaming or?

Guerrino De Luca

Well, I didn’t talk about PC gaming, PC gaming is more of an outside than the thing that we should. We have exited console gaming de facto about some time ago. I’d say that the categories we have exited we were for example like centuries ago we did scanners, this tools for many of you to remember and so we exited that. We made some experiments on some digital writing things and we did not pursue. But maybe the biggest thing that we aren’t going to exit and I said that creating enormous promotion on the web is set-top boxes for connected TVs. We worked on Logitech review for Google TV and we never thought that we would be a set-top box maker and so the idea was to help boost that platform.

At this point I think we have done what we needed to do and so in that sense we are not making more set-top boxes for Google TV or any other connected TV platform. On the other hand connected TVs Google TV or other platforms are still a great future opportunity out there. It's not going to happen overnight, but it will happen and it's another platform that we will follow as a connecting peripherals add-on supplier for those platforms Google TV whatever Apple comes up with if anything. These are things that we are watching very carefully, but we will not play in the infrastructure business of those businesses.

Ashish Sinha - Morgan Stanley

So, I mean one of the ideas since we are talking about review, one of the ideas was you control the user interface, you control the experience and you have a major role to play in the development of the smart TV platform which needs to probably cross selling opportunities in the future. Has this view changed?

Guerrino De Luca

No, this view hasn’t changed, the reason why we worked with Google on Google TV is to actually have an influence there, but we believe that and we did. We believe that our ability to connect to these platforms does not necessarily imply that we have to be in the making of those. We have not been in the making of Windows after all, and we are very good at connecting with Windows. Speaking of Windows one thing that I should touch on and we didn’t have the chance is, is Windows 8. Windows 8, has got a lot of buzz these days. Windows 8 is a potential game changer both for smartphones, for tablets and for PCs. It's the platform that takes advantage of a lot of learning that Microsoft had over the past couple of years from the success of the iOS and the Mac OS X but particularly the Lion version of it. Microsoft is great of taking cubs this way and they are taking the right cubs, I think Windows 8 adds the potential to be tremendously significant for all platforms, again from smartphone to PC and is a tremendous opportunity for us as well.

Windows 8 different from iOS in particular for example support more peripherals. Supports pointing devices; supports keyboards. And there are tremendous opportunity both around the tablet format and the PC format that comes to us through Windows 8, very important development.

Ashish Sinha - Morgan Stanley

Since just how you sometimes met, let’s touch upon two very important aspects of the businesses there, tablets. You already said it's a very big opportunity out there, you had a few products or peripherals for tablet so far, what’s the rollout plan, how is the feedback being on the initial products?

Guerrino De Luca

The products have been very well received, in fact, I see a lot of people using portable keyboards for their iPad, but there is a bigger point to make here. Tablets and particularly iPad which is the only meaningful tablet today and things may change, but it is the only, I the things will change progressively with Android and the potential biggest change will going be with Windows 8, but that’s a separate kind of. Today you can take two use of tablets, either they will be a complimentary device which means people will have tablets as well continue to use their PCs and their smartphone etcetera, or if they would be replacing, truly replacing fundamentally replacing personal computers.

I don’t want to comment on which one is more likely, but if the fist model is likely, meaning tablet are additional and you do certain things with tablet then the opportunity for peripherals around tablet is not enormous. Because if they are using they are used for consumption, you will provide a little bit of earplugs and stuff like that, we will do that.

People occasionally will be able to carry the tablet they will use the keyboard because they just need to type, which means there are two additional opportunity may be not be. But totally non-cannibalizing of the business of the PC business. And the other view is, and some people hold it very respondly to that sooner or later people will just dump their PCs in a huge pile and always only use this thing. And when I say tablet I mean a direct manipulation one screen only device, today the iPad, tomorrow whatever.

Well, if that happens I can guarantee you that the productivity use of those products will require add-ons. Just a simple example. We add hundreds of iPad owners today. What they wanted most for their iPad in addition to what they have, and all the people that have considered a keyboard for the iPad all of them have said I want a mouse. Obviously, I don’t know if have ever used an iPad with a keyboard, if you have you go from typing to touching. Because the keyboard doesn’t control everything, if you want to write an email, you write it and then you have to touch the screen to push send or to scroll among the other emails.

So, there is combination of direct and indirect manipulation that is not great. And so these people want a mouse. To me that means that if you really use your iPad or your tablet as your only computer you will end up meeting the devices that make that computer productive and easier to use. There is no question about it. So, that’s a great opportunity. So, if it replaces the PC, it's a tremendous opportunity for us, if it doesn’t it's a smaller more segmented and less margin opportunity. That’s the way I said.

Ashish Sinha - Morgan Stanley

And lastly LifeSize, I mean sometime back LifeSize got a publicly talked about ambitions of reaching a billion of revenues in the medium term. Could you talk about some of the drivers for that, firstly what medium term is and in the market which is growing 15 to 20% medium term, even though you mean five years would require a significant step up in growth. So, how do you see LifeSize play?

Guerrino De Luca

(inaudible) round numbers when people come with them, yes we are going to be a $7 billion company in five years. I’ve learned, first of all I’m strong believer that LifeSize is the best thing that happened to Logitech in the last three years and I wasn’t responsible for it. I love it. I think they are growing and smart. They continue to compete being the small guy in a very smart way and continue to stay ahead of the pack both in price points in approach to infrastructure, in infrastructure as a service, in virtualization. It's amazing what these people are doing with their portfolio and lineup. I’m very happy with them. I want to step back about the big goals. One of the things that I have not done recently and much to the (inaudible) of many people that don’t like to see that, it make big proclamation of growth, targets and profitability target. This is not the time to do it.

We are rebuilding all of our growth drivers, some we are more sitting off and continue to be there, some we are just rebuilding them. I’m enormously optimistic of the company, here from now, we look very different than it looks today. But I’m not going to be bold statement because nobody will believe me, so I might as well keep them for myself. So I think the proof will be in the putting in what we deliver this year what we will begin to deliver early next year, and I stick to that. I mean you will not hear big proclamation of profitability or growth from me for a while.

And then it will come once everybody is more appreciative of what’s going on and when we have a better sense of how these seven, I counted seven potential growth driver for the company, how they will develop, how they rollout, how they perform. LifeSize, Harmony, Digital Music particularly non-PC, the PC in emerging market, the PC business, tablet peripheral and last but not least the PC in consumer markets in the western world.

These seven things are the things we are doing and they act. All of different dynamics, but all combined I think will make a very different company in 12 months.

Question-and-Answer Session

Ashish Sinha - Morgan Stanley

Let’s see if we have any questions from the audience.

Unidentified Analyst

(Question Inaudible).

Guerrino De Luca

Okay. I recommend that you should consider buying mouse or keyboard or web cam or speakers of PC peripherals or a tablet for Christmas, (inaudible) grateful. But look at this Mini Boombox speaker that we just introduced it's fascinating. You can use it as speaker phone as well as a tiny little thing goes everywhere, Bluetooth, works with every Bluetooth, I’m sorry, wrong conference.

Unidentified Analyst

A quick question if I may on is the LifeSize business how do you take this business to the next level. Is this something you envisioned that it's going to remain in the enterprise or do you see moving to consumers and then do you take it to emerging markets as well?

Guerrino De Luca

That’s an interesting point, I mean LifeSize is focused obviously on the business market and the enterprise market. One of the reason we bought [at this stage],we felt and we do believe today that the banners between consumer and business in video communication will break. And so we are actually presiding on both sides of that fence and so I cannot exclude it overtime, a some version of what LifeSize does, for example the LifeSize connection, infrastructure as a service and outsourced videoconferencing. That may end up moving into the consumer space.

Today what LifeSize has done smartly is to acknowledge that the office is not the only place for videoconferencing to take place. So with the Mirial acquisition they enabled a very broad deployment of videoconferencing across the mobile workforce, meaning at home of all places. You can do it on a PC, you can do it on an iPad, you can do it on a tablet, from Android, you can do it on a iPhone or at Android phone. There is no other company that allows all these devices to participate in a classic high end videoconferencing and is LifeSize does. So, in that sense that is the first step.

The second step [meeting] true consumer we will see. But that’s the direction that is set for LifeSize.

Unidentified Analyst

And emerging markets, how do you?

Guerrino De Luca

Marginally present in China and India. So, it will increase its focus there, there is plenty of work to do and footprint gain in the established markets for LifeSize that is not a highest priority. That said, the market is moving very fast and we don’t want to miss any train. So, it's a balancing act. One of the reason we are continuing to invest in LifeSize is exactly that we think that if every time we compete we win. If you are in a situation like that, you try to compete in more places, and that mean it actually improve the emerging markets.

Ashish Sinha - Morgan Stanley

Let’s see if the audiences changed its mind, any questions please.

Unidentified Analyst

Just a question on peripherals around the tablets, Steve Job was quite adamant around the finger being the best peripheral for a tablet. Do they make it very difficult if you add, use an add tablets on to the operating system. And do you work with them to try to produce those peripherals to the operating system.

Guerrino De Luca

What Apple has done in case of the tablet or the iOS platform is not necessarily to make it very difficult for you to attach, but is to for example, not supporting important devices, which Windows 8 and Android do. So, it's a choice. Remember the ideological battle between one button mice and two button mice, you probably were too young to remember that. Apple always felt that one button was it, the precision and the simplicity of one button. As it happens Apple mice will be multi button, but nobody talks about it anyway. So, it's close to that but no, I don’t think, I don’t see any particularly, we are working with Apple on a number of phones. So, I wouldn’t say that that’s an optical. There are some philosophical views that they have and we will respect, after all they did great products with those views. Thanks.

Ashish Sinha - Morgan Stanley

I guess that’s all we have time for. So, thanks a lot Guerrino for coming.

Guerrino De Luca

Thank you.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: Logitech Management Presents at Morgan Stanley Technology, Media and Telecoms Conference - Conference Call Transcript
This Transcript
All Transcripts