Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Ted Chung with Bear Stearns. Ted, your line is open.
Ted Chung - Bear Stearns
I’m just drilling down on your Harmony sales in Europe. Is there anything specific that occurred?
Guerrino De Luca
If you look at the comparable year over year, what happened a year ago, we placed very successfully the product in a few stores. We capture very quickly the bunch of early adopters that just were waiting for that but then we did not follow up properly in broadening that distribution and making the in-store support and training that we did in the U.S. We know that. We are working on it. We have a dedicated team that focuses on a subset of our portfolio, particularly Harmony, and we believe that that’s going to help us a lot in Europe.
On the other hand, our sales in the U.S. continue to be very vibrant. We grew I believe more than 40% in the U.S. this category year over year, which proves that the offering is very compelling and the opportunity is great.
So we’re working the European angle. We understand what’s happening and we are attending to it.
Ted Chung - Bear Stearns
Would you still be targeting Harmony to be roughly around a $100 million business for the end of this year?
Guerrino De Luca
Well, first of all, Harmony was close to $100 million at the end of last year and we continue to believe that it is going to be a double-digit growth product substantially this year, yes.
Ted Chung - Bear Stearns
Just focusing on the webcam slowdown, is there any particular reason -- can you explain more in detail what happened with the channel inventory?
Guerrino De Luca
Well, let’s look at this in -- we’ve seen in the April and May timeframe a decline of the webcam market in Europe. The beginning inventory of our channels, our partners were not expecting that level of slowdown. In fact, we were not expecting that level of slowdown either. So what happened is that the beginning inventory was matched to a flatness of the market. The market was worse than that and therefore they took a longer time to sell what they had which reduced our selling opportunities.
As Mark mentioned, this situation also created a reduction in channel inventory sequentially which bodes very well for the future but it is the mismatch between the channel expectation of growth and the actual market growth that we experienced in several companies in Europe.
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