Logitech has built its business on the humble computer mouse. Company president and CEO, Guerrino De Luca, talks to ARN about the broader portfolio it offers today and key market trends.
Computer mice are the biggest part of Logitech's business today but where do you see growth opportunities?
Mice are still a big part of the portfolio. They used to account for virtually all of it many years ago but now they're about one third. That said, you might be surprised to hear that one of the biggest growth drivers in the last couple of years has been mice. They have an incredible resilience because they're a very personal technology device. As such they are subject to preferences and evolutions that have more to do with the experience than functionality. The mouse is a simple device that tracks surfaces and clicks so it can be simplified enormously in the same way as a watch and yet there is a tremendous breadth of choice. The main reason mice are growing so fast right now is that the laptop has become the desktop. It's not just that people are travelling more; they are choosing that form factor for use at home. The phenomenon of portable computing is more relevant at home than in the enterprise. Notebooks don't come with a mouse and after a while the consumer cannot stand using the integrated pointing device. These were conceived for travelling but it is much more comfortable to use a mouse. People are buying mice that are smaller and can travel with you. Cordless versions drove the first new wave of mice sales but now it is portability.
The mouse is a simple device. What new functionality can we expect to see?
Tracking went from a ball to sensors, then better sensors, and today's optical sensors have problems with certain surfaces. We have been working on improving that and have gone to laser versions but we are getting close to tracking on every surface. That's the next big thing. Then there's navigation, which has gone from clicking to scrolling and now hyper-scrolling. Our VX Nano is a cordless, laser mouse for notebooks with the smallest receiver on the market and a hyper-scrolling wheel. It's a huge product for us. Our MX Air is a mouse that doesn't need to be on the desk to work. It's great for lying back on the couch while using PC media. People will not be without navigation devices so making them more suitable for what people do is a big deal for us.
If mice are only one-third of your business today, what makes up the rest of it?
Our second largest business is a race between audio - iPod speakers and PC speakers - and keyboards. They are both close to mice in size. Then there are Web cams and gaming devices for PCs and Play-Stations. Most recently we have released two new categories targeting the new wave of consumer electronics - remote control devices are the fastest growing business we have and, more recently we have released streaming media systems. We are broadening beyond the PC and getting more into the living room.
If the market is increasingly going mobile, what is the future for the humble desktop PC?
There will be a future for the desktop in the enterprise and I believe education will use desktops for a long time yet. There's a role for desktops because the install base is so huge that change is not going to happen overnight. There are still more desktops than notebooks and that means there is still a tremendous opportunity to sell products around the desktop. However, it's true that the future is about form factors that allow portability and I think the biggest opportunity is the notebook that travels but only around the house. Resellers can surround that notebook with products that make it more comfortable to use such as stands, keyboards and USB hubs.
You mentioned that remote controls are the fastest growing segment of your business. When will we be able to flick easily from TV to a browser?
The problem with the living room is that devices proliferate but we are missing the unifying element. Either you choose everything from the same brand, but then you can't get the latest products if that brand doesn't make them, or you have this immense choice of devices. There's an opportunity to tame this complexity and there are devices that can control your living room if the PC is the master. There are others that control your living room if the PC is not the master. Can the two come together? Of course they can but for now we are addressing usage in different ways.
What will be the most significant industry change during the next five years?
IT is graduating into the consumer electronics world and that is a mega-trend. The traditional consumer electronics world is led by Asian companies that dominate miniaturisation. Consumer electronics 2.0 is all software interface and network driven so the IT industry has a tremendous opportunity. The iPod is a classic example of consumer electronics 2.0 because the entire back-end is new. The IT industry can bring what it has learned in software and UI [user interface] to change the balance of power in consumer electronics. Who would have thought that the portable music franchise Sony had with the Walkman could be destroyed? But it happened and UI is the answer.
How will that change the role of resellers?
For a number of them, particularly the smaller ones, it presents a fantastic opportunity to get into the living room.
But consumer electronics have traditionally been sold in much bigger department stores. Why is that going to change?
Those stores will be challenged because they will need to upgrade their skills. While all of these devices are easy, they require different skills than just turning on a TV. There's an opportunity for smaller independents to take advantage of that. Some people will take that opportunity while others will be forgotten.