Two european engineers start a company in Switzerland, take it public, move the headquarters to California and recruit an Italian-born marketing whiz from Apple to run it. The company evolves from a humble provider of mice to selling a whole family of computer gadgets, including cordless keyboards and webcams.
In this grim, post-bubble era, a once-promising tech company like that would probably have gone bust by now. But Logitech is defying that logic. Despite the economic downturn and a worldwide dip in PC sales last year, Logitech's profits grew by 66% to $69.1 million on revenues of $719.8 million in the most recent nine-month period. Meanwhile, Logitech stock closed in February above $40, near its all-time high and up from $7.50 in February 1998 when Apple veteran Guerrino De Luca took over as CEO. In a recent report Credit Suisse First Boston, citing a famous American TV commercial, dubbed Logitech "the ultimate Duracell bunny, it just keeps going and going and going."
So the story doesn't stop there. This month at CeBIT Logitech
will unveil its entry into the mobile sector. The move
is part of the company's plan to explore realms beyond
the PC. "We want to providethe human interface layer,
regardless of whether you are using a PC, a gaming console
or a mobile device," says De Luca.
Last year the company branched out into steering devices
for Sony's PlayStation 2 game console, selling 500,000
in just a few months in 2001. Credit Suisse First Boston
predicts that sales of the PlayStation 2 wheels will hit
$30 million in fiscal 2002. The mobile business, which
is at least twice the size of the PC market, represents
much more potential: there are
| KEYCASE PALM 505 You can wrap the keyboard around the PDA. The conductive fabric can also withstand coffee spills |
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MARC ASNIN/CORBIS SABA
for TIME
APPLE
VETERAN De Luca has polished up the stock
price |
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a billion mobile telephones
in use plus 50 million PDAs, compared to half-a-billion
personal computers.
The center of the company's new mobile focus
is the KeyCase, an all-in-one, wraparound
cloth keyboard and case for the Palm that
will be unveiled on March 14 and available
in stores soon after. Logitech has joined
forces with Britain's Eleksen, which specializes
in "soft switching and sensing" technology
that allows the detection of contact and motion
on soft material, to produce what they say
is the first fabric keyboard for PDAs to go
into mass production. "Our mission is to try
and become to the mobile platform what we
are to the PC," says Bernard Gander, Logitech's
vice-president for corporate business development.
"We don't want to make PDAs or cell phones,
we want to invent a new category of devices."
The KeyCase — about the size of a regular
laptop keyboard, though with slightly smaller
keys — is made of ElekTex, a lightweight
fabric that combines conductive and traditional
fibers in a way that allows it to be cleaned
with a damp cloth and still work, even if
you spill coffee on it. When a finger hits
a key, the soft-position sensing system sends
electronic impulses that can be understood
by conventional electronic equipment. And
because it is possible to program specific
areas on the cloth differently, the KeyCase
can function as a traditional keyboard and
also fold around the PDA to protect it when
not in use. Since the case is only slightly
bigger than the PDA, the whole thing will
fit in a shirt pocket. The pitch: Why buy
a regular protective case when — for
under $100 — you can get one that will
double as a keyboard? "It's soft, it's cool,
and it's fashionable," says Gander. "After
this goes into production we can print different
designs on the cloth, perhaps even Gucci or
Louis Vuitton versions."
A PDA slides into the KeyCase's patented cradle
while it is lying flat. A spring and hooks
designed to work with all PDA models with
a universal connector attach the handheld
to the keyboard. When the cradle is moved
into typing position it automatically turns
the Palm on, and you're ready to type. "There
is no need to take your notebook on the road
now," says Denis Pavillard, Logitech's worldwide
product marketing manager. "You can just use
your PDA."
At CeBIT, Logitech will also launch a foldable
hard-case keyboard for PDAs, called the TypeAway,
to compete with those sold by Targus and Palm.
"Targus is a great product," says De Luca.
"We made a mistake not to be interested in
it. We missed it big time." But Logitech is
betting that it can catch up with the KeyCase,
and the TypeAway — which is more useful
for keying in longer files, folds to a thickness
of 12.4 mm and weighs 110 g, making it significantly
smaller and lighter than anything on the market.
Logitech, which was created in 1981 by Daniel
Borel, a Swiss, and Italian Pierluigi Zappacosta,
has made a habit of diversification, acquiring
Connetix's webcam business in 1998 and Labtec's
last year. Today cordless products and cameras
account for about half of Logitech's sales,
while mice sales to computer vendors add up
to just 15%. At CeBIT, the company will introduce
its first Bluetooth product, a cordless mouse
for laptops with a built-in laser pointer
for giving presentations.
But Logitech has only scratched the surface
when it comes to add-ons for computing, gaming
and mobile platforms, according to Credit
Suisse First Boston. One of its recent reports
points to other new areas for Logitech, including
a potential deal on cordless headsets with
mobile phone manufacturers. Logitech's strong
launch of its steering wheel for the PlayStation
2 is no guarantee that it will do as well
in the competitive new areas it is exploring,
says Credit Suisse First Boston analyst Can
Elbi. Still, the financial community, including
CSFB and Lehman Brothers, sees Logitech as
a strong growth story. CSFB expects revenue
to increase an estimated 14% between now and
2005. Mice are nice, but the KeyCase and other
mobile devices are likely to play a key role
in keeping Logitech on its upwardly mobile
path. |
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PROMOTION
