VTech: Difference between revisions
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==History== |
==History== |
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VTech was founded in Hong Kong in October 1976 by two local entrepreneurs, Allan Wong and Stephen Leung. When the first single-chip microprocessor [http://en.wikipedia.org/wiki/Intel_4004|Intel 4004] became available in the early 1970s, the two young engineers recognised the huge potential it offered for portable consumer electronics products. They set up a small factory in [http://en.wikipedia.org/wiki/To_Kwa_Wan|To Kwa Wan], with a US$40,000 investment and a staff of 40 people. In the first year, turnover was less than US$1 million. |
VTech was founded in Hong Kong in October 1976 by two local entrepreneurs, Allan Wong and Stephen Leung. When the first single-chip microprocessor [http://en.wikipedia.org/wiki/Intel_4004|Intel 4004] became available in the early 1970s, the two young engineers recognised the huge potential it offered for portable consumer electronics products. They set up a small factory in [http://en.wikipedia.org/wiki/To_Kwa_Wan|To Kwa Wan], with a US$40,000 investment and a staff of 40 people. In the first year, turnover was less than US$1 million. |
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==Products== |
==Products== |
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'''TEL Products''' |
'''TEL Products''' |
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Revision as of 03:37, 22 October 2012
 | This article needs additional citations for verification. |
| Company type | Public |
|---|---|
| Industry | Computer hardware Computer software Consumer electronics, Educational toys, Cordless telephones. |
| Founded | 1976 |
| Headquarters | |
| Products | Little Smart, Whizkid, Kidizoom, V.Smile, V.Flash |
| Revenue |  US$1.448 billion (2009)[1] |
| US$154 million (2009)[1] | |
Number of employees | 27,000 (2009) |
| Website | www.vtech.com |
VTech (Simplified Chinese: 伟易达 Wěi yì dá) (Traditional Chinese: 偉易達 Wěi yì dá) is the world’s largest manufacturer of cordless telephones and electronic learning products (ELPs). It is also one of the top 30 electronic manufacturing service providers globally.
Name and Listing
The company was originally named “Video Technology Limited” in reference to the company’s first product, a home video game console. In 1991, it was renamed “VTech Holdings Limited” to reflect a wider portfolio of products.
The company first listed in Hong Kong in June 1986 under the name “Video Technology International (Holdings) Limited”, by way of introduction. It was privatised and delisted from The Stock Exchange of Hong Kong Limited in 1990.
VTech obtained a primary listing on the London Stock Exchange in 1991. In 1992, the company relisted on The Stock Exchange of Hong Kong Limited, establishing a dual primary listing with London. In 1993, the company established its Depositary Receipt programme.
VTech delisted voluntarily from the London Stock Exchange since 7 October 2008 [2]. It also terminated its American Depositary Receipt programme with effect from 21 January 2011.
History
|
VTech was founded in Hong Kong in October 1976 by two local entrepreneurs, Allan Wong and Stephen Leung. When the first single-chip microprocessor 4004 became available in the early 1970s, the two young engineers recognised the huge potential it offered for portable consumer electronics products. They set up a small factory in Kwa Wan, with a US$40,000 investment and a staff of 40 people. In the first year, turnover was less than US$1 million.
VTech focused on developing video games in the early years. In 1977, the company created its first home TV game console, called Pong At that time, the Hong Kong market for such products was small and only consumers in North America and Europe could afford such items, which were relatively expensive. Hence, the company targeted primarily these overseas markets.
The United Kingdom was chosen as the first market for Pong, as Hong Kong and the UK used the same standard for television systems. As a small start up, the company found it costly to enter the US market, as its products were required to pass Federal Communications Commission (FCC) tests, which cost several thousand US dollars.
After exporting to the UK, the company still had no idea how to open the US market. In 1978, the founders tested the water by introducing their in-house developed LED games to buyers from Radio Shack. This first meeting ended in less than a minute without success, as the ex-factory price of the product was too high.
Six months later, however, the two founders met with the Radio Shack people again. They cut the product cost by half, lowered the selling price by a few dollars more and finally agreed upon a deal. The product was put under the Radio Shack brand and the buyer bought about 60,000 units. The consumer response was good and the products sold well.
Through this exercise, the founders realised that, as a manufacturer that they would not be able to make the profit they wanted if they continued selling their products under another brand. So they made up their minds to sell to retailers directly under their own brand name.
Inspired by Texas Instrument’s “Speak and Learn Aids”, VTech unveiled its first electronic learning product (ELP) called “Lesson One” at the New York Toy Fair in February 1980. It taught children basic spelling and maths at a retail price of just US$29. An exclusive version under the name “Computron” was offered to Sears in return for VTech getting a prominent advertisement placement in the famous Sears catalogue. In the first year, Lesson One was available in a limited distribution of just 35,000 units, and about 70,000 units in total of Lesson One and Computron were sold, becoming among Sears’ best sellers during that year.
The next several years saw VTech develop its ELPs further while also branching out into personal computers, including a series of IBM compatible PCs beginning in 1983 and Apple II compatible computers beginning in 1985. VTech exited the personal computer market in 1997 due to keen competition.
In 1985, the FCC allocated the frequency band 900MHz to ISM (industrial, scientific and medical) devices. Taking advantage of this, VTech started developing a cordless telephone using the 900MHz band and in 1991 introduced the world’s first fully digital 900MHz cordless telephone.
The product was expensive, and so despite offering longer range, better voice quality and greater security than the existing analogue, low frequency cordless phones, it was not an instant success. But in 1996, when VTech launched its fourth generation 900MHz cordless phone, the 910ADL, at a retail price below US$100, the product line started to take off. High frequency, digital cordless telephones soon began to replace analogue, low frequency models and before long became the mainstream product in the market.
In order to expand its cordless phone business further, VTech acquired the consumer telephone business of Lucent Technologies in 2000. The acquisition also gave VTech the exclusive right for 10 years to use the AT&T brand in conjunction with the manufacture and sale of wireline telephones and accessories in the United States and Canada.
Although the acquisition increased sales of VTech’s telecommunication products by 50%, it led to major operating losses and write-offs. The company issued a profit warning in March 2001 and quickly launched a broad restructuring plan to reduce costs, raise efficiency and increase synergies among its worldwide operations. By the financial year 2002, the company had turned around the business and returned to profitability.
In the years since, VTech has continued to innovate in cordless telephones and electronic learning products. Its contract manufacturing services, which manufactures a range of electronic products on behalf of medium sized companies, has also grown steadily, and in recent years has become one of the company’s major sources of revenue. The company has also diversified geographically, selling increasingly to Europe, Asia, Latin America, the Middle East and Africa.
Product Lines
Telecommunication (TEL) Products
VTech is a first mover in the cordless telephone industry. It introduced the world’s first 900MHz and 5.8GHz cordless phones in 1991 and 2002 respectively. Currently, the company is the world’s largest manufacturer of cordless telephones, making nearly one third of the world’s residential cordless phones.
In North America, VTech is the largest player in the industry, selling both AT&T and VTech branded phones in all major retail stores. Outside North America, VTech mainly supplies products to major fixed-line telephone operators, well-known brand names and distributors on an original design manufacturing (ODM) basis. VTech is the exclusive supplier to Deutsche Telekom for all its corded and cordless phones in Germany and the direct supplier to Telstra for all its fixed-line telephones in Australia.
VTech has launched its first commercial phone, targeting small to medium sized businesses, in 2009. The product lines include SynJ® and Synapse®, which are currently sold in the US market. In late 2011, VTech further expanded its product portfolio with the introduction of phone systems for hotels and is now shipping hotel phones to major hotel chains worldwide.
Other telecommunication products VTech manufactures includes cordless headsets, Integrated access devices and baby monitors.
Electronic Learning Products (ELPs)
VTech is regarded as the pioneer of the ELP industry, beginning in 1980 with its Lesson One, designed to teach children basic spelling and mathematics. Over the past 30 years VTech has developed high quality, innovative educational products designed to enrich children’s development through fun and smart play, each year winning numerous media and industry awards.
Today VTech is the world’s largest manufacturer of ELPs, making both individual standalone products and platform products that combine a variety of consoles with different software. Its range of products addresses the needs of children from birth to their pre-teens. The highly successful V.Smile TV Learning System, which was launched in 2004, established the importance to the company of platform products, which are now a key category within ELPs.
VTech’s ELPs can be categorised as follows:
| Standalone products | Platform products |
|---|---|
| • Infant learning (0 – 3 years)
• Pre-school learning (3 – 6 years) • Grade school learning (6 – 8 years) |
• InnoTab Learning App Tablet (3 - 9 years)
• V.Reader Interactive e-Reading System (3-7 years) • MobiGo Touch Learning System (3 - 8 years) • Games and e-book cartridges • Download apps |
Contract Manufacturing Services (CMS)
VTech started manufacturing products on a contract manufacturing basis as early as 1980s. As VTech’s product lines evolved over the years, however, CMS grew to become one of the company’s core product lines in the early 2000s.
VTech is currently one of the world’s top 30 electronics manufacturing services providers [3], providing one-stop shop electronics manufacturing services to medium sized companies. VTech’s CMS has focused on four main product categories: professional audio equipment, switching mode power supplies, wireless products and solid-state lighting.
VTech’s CMS has built a solid reputation in the professional audio area and has expanded into new product categories. In November 2011, capacity was increased by 40% and the manufacturing facility was enhanced to enable VTech to manufacture sophisticated products with stringent safety and quality requirements, including those requiring FDA (US Food and Drug Administration) approval. This is allowing the company to expand its product portfolio into the medical and health care field.
Products
|
TEL Products
• Introduced the world’s first 900MHz cordless phone in 1991
• Became the first company in the industry to introduce a 900MHz cordless phone at a competitive retail price below US$100 in 1996
• Introduced VTech’s first 2.4GHz cordless phone in 1999
• Introduced the world’s first 5.8GHz cordless phone in 2002
• Launched VTech’s first cordless phone with Bluetooth connectivity in 2008
• Launched VTech’s first commercial phone targeting small to medium sized businesses in 2009
• Introduced the world’s first CAT-iq 2.0 certified handset in 2011
• Started shipping hotel phones in 2011
ELPs
• Lesson One (book type version): VTech’s first ELP that taught children spelling and mathematics. Lesson One was launched in 1980 and it was one of the first ELPs in the world.
• CreatiVision: VTech’s first hybrid computer. CreatiVision was a fully functional personal computer and video game console introduced in 1981.
• Socrates: VTech’s first educational video system with wireless remote controls. Socrates was launched in 1988.
• V.Smile TV Learning System, an educational TV game platform for children aged 3-7, that was released in 2004. V.Smile was very popular and won the top industry awards in Europe and US.
| 2005 Toy of the Year Winner | Toy Retailers Association | Toy Innovation 2005 |
|---|---|---|
| United States
• Best Overall Toy of the Year • Best Educational Toy of the Year |
United Kingdom
• Electronic Learning Toy of the Year |
Germany
• Toy Innovations Award 2005 – Learning Category |
The overwhelming success of V.Smile led VTech to expand the idea into a range of products, including the portable V.Smile Pocket, the baby version V.Smile Baby, and an advanced system for elder children, V.Flash. An enhanced version of V.Smile was introduced in 2007, adding a microphone and a writing joystick. In 2008, a new console called V.Motion was launched, which was an upgraded version of V.Smile with a wireless motion-activated controller.
• Kidizoom Camera: A digital camera for children that was launched in 2008. It was the top selling toy in the UK during 2009 and 2010, and in Germany during 2008 and 2009.
• V.Reader Interactive e-Reading System: Unveiled in 2010, V.Reader was the world’s first interactive e-reading system for children aged 3-7. It brought stories to life through narration, music, animation and interactions. The product was called “Storio” in Europe.
• MobiGo Touch Learning System: A handheld educational gaming system for children aged 3-8. It was launched in 2010. Its colour touch screen and slide-open keyboard enriched game play experience. The upgraded version, MobiGo 2 was launched in August 2012, equipped with two new ways to play: a motion sensor and a microphone.
• InnoTab Learning App Tablet: A multi-functional tablet for children ages 3-9 that was launched in 2011. InnoTab offered interactive and animated reading, educational gaming and creative activities through cartridge and/or downloaded apps. The enhanced version, InnoTab 2, became available in August 2012, with upgraded hardware and a rotatable camera.
• Switch & Go Dinos: A new line of toys in 2012 that transform between dinosaurs and vehicles. Each Switch & Go Dino comes equipped with an LCD screen for customised animation, dinosaur and vehicle sound effects and educational dinosaur facts.
Criticisms
A June 2012 report from the Institute for Global Labour and Human Rights[4] says the working conditions in the VTech factories in China fail to meet the legal standards and can be described as Sweatshops. On 22 June 2012, VTech issued a statement reiterating it is a responsible and caring employer who abides by the legal requirements relating to employment in all jurisdictions where it operates. VTech rejected the allegations made by the Institute for Global Labour and Human Rights.