Before we carry on with this post, a quick word about this – in the same way that violence in South African newspapers doesn’t faze me anymore, layoffs and company losses and product culls don’t surprise me. Even though we’re a long way out of the global recession, companies continue to get hit hard with increasing production costs, lack of consumer interest and waning global support as some countries look to producing their own products to bring down the amount of expensive imports (here’s looking at you, China). The latest company to announce losses and chops to things that aren’t working out is Logitech – the first to go is the Harmony remote and its hardware development team.
Last week Wednesday the company posted a pretty big loss in its third-quarter fiscal 2013 results, reporting a net loss of $195 million, compared to net income figures of just $55 million. Sales were also down by 14%, due to what analysts say is a “waning” PC market. The company’s CEO, Bracken Darrel (Bracken…lol) said in a statement that the company will continue supporting the PC industry, but will focus further on the range of tablet accessories currently on offer.
“Our goal with PC-platform products is to maximize profitability, while investing selectively in growing categories,” he said. “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.“
So that means a couple of things. The Harmony remote division’s sales were down by 24% with unit production down by 55%. I’d argue that a good amount of this was actually Logitech’s fault, shooting itself in the foot by launching a Android and iOS-compatible version of the Harmony software allowing any Android/iOS device to use the same features found on the Harmony remote to control internet-connected devices. Good going there guys, you killed off any reason to buy the actual hardware.
For those of you wondering about their security camera market, that pretty much pertains to their IP camera range. The market for IP cameras is rather small and probably already covered by the many, many networked DVR options available with fitment included by other security companies. Ditching it was a good idea since its not something Logitech can easily break into and would take at least another year before it really kicks off.
Already there are some changes made on the Logitech website – the console controllers compatible with both the PC and PS3 have disappeared and a number of older generation iPod/iPhone docks have been hidden away as well. Many customers still picking up bargains like the iPhone 4S and the older iPods will have to look elsewhere for new speakers as stocks disappear. Not much mention is made of what console peripherals will be cut, however (or for how long warranties will be supported). There’s pretty much a cult built around the Driving Force range, so there won’t be much worry over that one, though its a sad day for console owners. Logitech made superb alternatives to the standard Playstation controllers, some of them even lasting years longer than the real thing. Razer pretty much owns the third-party Xbox 360 controller market, so perhaps that was a good idea and probably an eventuality in any case.
The rest of their lineup, though, like the PC peripherals and the speaker sets will remain untouched, as the company still enjoys good sales numbers and lots of revenue from those markets.