Strategy-Plantronics

PLANTRONICS, INC MOBILE & GAMING BUSINESS

The mobile and gaming business unit, being a part of the Audio Communications Group contributes around 26% of the business with the CAGR on a 5 year scale being the highest amongst the ACC and the AEE group at 21%.

* MOBILE BUSINESS:-

PLT was number 4 in market share in this segment. The mobile space had product offerings of corded (14%) and Bluetooth wireless headsets (86%), which gave almost 15% margin to the company. With the Bluetooth market estimated to grow at a CAGR of 28% to 2010, the mobile business for PLT would also increase at a CAGR of 25% , keeping the corded market to be constant {blue tooth market=350 in 2007, 126MM of PLT assuming 86% is Bluetooth, making PLT to be 36% share in the blue tooth segment}. The life cycle for these products was approximately 1-2 years.

Competitive Landscape:-

The main competitor for PLT in this segment was the Jabra division of GN who was their competitor in most of the other segments as well. They had a 25% global market share followed by Motorola and Nokia. Almost 50% of the sales of Jabra was via OEM contracts with cell phone manufacturers and 10 largest customers accounted for 70% of the sales. They divided the market into 2 core segments>>Premier mobile and mainstream mobile both with single digit operating margin. The plan was to grow in volumes in the mainstream mobile and improve the quality and introducing trend -setting products. The main strategy of GN was to retain the market leadership in this segment.

* GAMING BUSINESS:-

PLT produced PC and video game console compatible one- and two-ear headsets. The customers were primarily the computer and game OEM’s and other telecom companies. The business had a CAGR of 21% and the margins were approximately 12%.This market segment was similar to the mobile business and involved volatility in revenue streams due to the change in demand & short product cycles hence leading to inventory...