Logitech ditches console peripherals business
Poor financial results has Logitech pursuing a revised peripherals strategy
In their latest financial results update (FY 2013), Logitech has announced that they are ditching production of console peripherals and other “non-strategic products” by the end of 2013, such as speaker docks, remote controls, and digital security video products.
More tablet PC, smartphone, and desktop PC accessories are now on the cards to drive the company forward.
The reason behind this is a strategic review based on poor financial results – the company reported an operating loss for financial year Q3 2013 (Q3 FY 2013).
Logitech’s retail sales for Q3 FY 2013 decreased by 14 percent year over year, down 8 percent in the Americas, 11 percent in Asia and 20 percent in EMEA. Year over year, OEM sales decreased by 23 percent and sales for the LifeSize division decreased by 4 percent.
Sales for Q3 FY 2013 were US$615 million, down 14 percent from US$715 million in Q3 FY 2012, with no material impact from exchange rates. The company posted an operating loss of $180 million, which included a non-cash goodwill impairment charge, estimated to be $211 million, announced on January 22, 2013.
Net loss for Q3 FY 2013 was $195 million compared to net income of $55 million ($0.32 per share) in Q3 FY 2012.
“As we articulated when we started the third quarter, continued weakness in the global PC market was the primary factor in our disappointing Q3 results,” said Bracken P. Darrell, Logitech president and chief executive officer. “These results are unacceptable and we are taking decisive action as an outcome of my strategic review.”
“We intend to sustain our leadership in PC platform-related products where we have engineering, distribution and scale advantages. Our goal with PC-platform products is to maximize profitability, while investing selectively in growing categories”
We have also identified a number of product categories that no longer fit with our current strategic direction. As a result, we have initiated the process to divest our remote controls and digital video security categories, and we plan to discontinue other non-strategic products, such as speaker docks and console gaming peripherals, by the end of Calendar Year 2013,” said Darrell.
Source: Logitech Investor Relations
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