Logitech Formally Exits OEM Mouse Market
by Anton Shilov on January 22, 2016 12:00 PM EST
In a bit of news that is a sign of the times, this week Logitech announced that it had completed its exit from the OEM mouse business. The company no longer sells OEM mice, which for a long time accounted for a large portion of Logitech’s revenue. Instead the company will continue to focus on new categories of premium products for retail markets.
Logitech was among the first companies to mass-produce computer mice back in the eighties. For decades, its mice were supplied with PCs made by various manufacturers and for a long time Logitech’s brand was synonymous to pointing devices. In fact, Logitech’s U96 is among the world’s most famous optical mice since it was bundled with millions of PCs. However, a lot has changed for Logitech in recent years. As sales of desktop PCs began to stagnate in the mid-2000s and the competition intensified, OEM margins dropped sharply. At some point, OEM business ceased to make sense for Logitech: there was no growth and profitability was minimal.
Last March the company announced plans to stop selling OEM devices, and in December Logitech made its last-time shipments, entirely depleting its inventory. Sales of OEM hardware accounted for about 4.45% of the company’s revenue in Q3 FY2016, which ended on December 31, 2015. Due to razor-thin margins, Logitech’s OEM business was not exactly something that could be sold for a lot, according to the company. Moreover, it did not make a lot of sense for Logitech to sell it and license the brand to a third party.
Logitech has been expanding its product portfolio for many years now and while mice, trackballs and keyboards remain three key types of products for the company, they no longer account for the lion’s share of Logitech’s revenue. The manufacturer recognizes gaming gear (which includes mice, keyboards, speakers, headsets, controllers and other devices), mobile speakers, video collaboration as well as tablet and other accessories as its key growth categories of products. Net sales of Logitech's growth category products totaled $224.87 million in Q3 FY2016, net sales of traditional devices totaled $368.87 million, whereas OEM business brought only $26.512 million in revenue. The lack of OEM mice in Logitech's portfolio will be offset by growing sales of other products.
Ultimately even though Logitech stopped to sell cheap mice to producers of PCs, Logitech remains one of the world’s largest suppliers of pointing devices and keyboards, and many premium personal computers still come equipped with the company’s advanced keyboards and mice designed for gamers. These days the company has also taken on a more well-rounded portfolio, with significant presences in speakers, PC headsets, webcams, remotes and other devices.
Source: Logitech Investor Relations
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Arbie - Friday, January 22, 2016 - link
I, like many others, have worn out the microswitches in our high-end Logitech mouse. My MX518 apparently used inferior "OMRON D2FC-F-7N" switches made in China. Eventually one began to register as a double-click and no software around could really make it usable. I replaced these switches with "OMRON D2F-01F" made in Japan. These have cured the problem. No doubt new Chinese switches would also work fine for now, but the Japanese version has a more distinctive click and I think it will last longer. Just FYI.extide - Monday, January 25, 2016 - link
Hrmmm, I wonder if those Chinese ones were fakes, I thought all OMRON switches were good/high quality.Valantar - Friday, January 22, 2016 - link
You've obviously had some bad experiences. My experience with Logitech is one of great quality (I've never had a Logitech product actually stop working, and I've owned and own quite a few) and exceptional customer service (as in getting a replacement for a DiNovo Media Desktop BT keyboard that I spilled soda on, resulting in a few sticky keys). Heck, my 15-year-old MX700 still works, if I bother to dig it out of storage.Your mileage may vary, in other words.
Michael Bay - Sunday, January 24, 2016 - link
I`ve had three G100/G100s go doubleclicking after about 8 months. Quite a lot to be a coincidence.Michael Bay - Saturday, January 23, 2016 - link
I`m okay with that if they fix their G100s series.hubick - Saturday, January 23, 2016 - link
My previous two mice were both high-end Logitech mice, and within a year of light (non-gaming) use, both ended up producing random double-clicks when I single-clicked. They need to learn "premium" is more than just market positioning and charging quadruple, before everyone else learns that's all they're doing.arrivalRate - Saturday, January 23, 2016 - link
I used to buy cheap knock-off mice - I'm looking at you, Gear Head - until it became clear the lower price was completely illusory. In my own experience, cheap brands were actually not cheap at all. They consumed batteries inordinately fast even with diligence to turn them off when unused, and loss of productivity from vastly inferior pointing control. After 3 poor quality mice I broke down and paid the extra $10 or $12 more for a high quality Logitech mouse. For me, precision pointing and very long battery life is worth it (M525, M325).techfreshness.com - Monday, January 25, 2016 - link
was anybody else as confused as me by the logitech slide?extide - Monday, January 25, 2016 - link
The percentage is how much of the market they own. The #1/2/etc is their rank in that market with their competitors.