logitech: here, there and everywhere

Logitech: innovation is their strength (Logitech) source: Logitech

Since its humble beginnings in the countryside near Lausanne, Logitech has become in little over 20 years the world leader in computer devices.

But rather than bet on its Swiss origins, the firm would bank on its international character.

“Americans think Logitech is American, and the Chinese think it’s Chinese,” is how the company’s director for Switzerland, Sandro Isteri, sums it up.

The company, created in a village called Apples in 1981, tends to try to blend in with its environment.

“We still have plenty of ties with Switzerland, but we are an international company working in 150 countries nowadays,” Isteri told swissinfo. “Stating that our products are Swiss made is not so important in our sector.”

Logitech has about 7,200 employees around the world, with approximately half that number working in Chinese factories. The firm employs just 250 people in

Switzerland, including 200 engineers designing optical and wireless technology just outside Lausanne.

“We don’t produce anything anymore in Switzerland,” said Isteri.

“To be truthful, we can’t put something together here and ensure high quality at an affordable price as well as expect to make a profit. It’s simply impossible.”

Interface

Logitech’s speciality is creating an interface between humans and the digital domain. But what started out as a niche market is now a major business.

The company produces 120 million units each year – ten times more

than watchmaking giant Swatch, according to Logitech founder and chairman Daniel Borel – with sales of about SFr2 billion ($1.65 billion).

Computer mice and keyboards are no longer the only products coming out of Logitech.

It has gained a strong foothold in the internet communication – audio, video and webcams – and is producing audio accessories for digital devices, game controllers or universal remote controls.

“Each year, we roll out 100 new products,” claims Isteri.

“Wireless keyboards, optical mice, ergonomic designs or technical improvements in the audio and video sectors are hallmarks of

Logitech, making us the leader in almost every field we are active in.”

Davide Gai, a journalist and head of a computer fair, says that the company’s creativity and capacity to innovate are its main strengths.

“Their products really improve the interactions between users and devices,” he added.

“If you compared Logitech with the automotive industry, I would say it is the Rolls Royce of its sector.”

Bright future

The future looks bright for the Swiss firm, which plans to double its revenues and profits in the next five years. Chairman Borel remains cautious though, declaring he would

be happy to see the company survive another ten years.

This is not particularly surprising given the stiff competition in the sector and ongoing technological evolution. Fortunately, Logitech’s financial health and capacity to innovate should stand it in good stead.

“I suppose Daniel Borel meant we can’t rest on our laurels,” said Isteri. “If we want to stay ahead, we can’t let up on our efforts.”

The most obvious threat to Logitech could be the drop in computer prices.

“Computer prices fell by 50 per cent last year whereas the cost of peripherals rose,” added Isteri.

“We will have to see in the future if customers are prepared to spend a quarter of their computer costs on peripherals.”

swissinfo, Marzio Pescia

In brief

Logitech was founded in 1981.

The company has its corporate headquarters in Fremont, California but it maintains a strong global presence.

Its headquarters for Europe, the Middle East and Africa are located at Romanel-sur-Morges near Lausanne.

Logitech has been dealing with individual customers only for the past 15 years. Previously it had been a supplier to the computer industry as an original equipment manufacturer (OEM).

Key facts

Sales for the year ending on March 31, 2006 were $1.8 billion (SFr2.29 billion), up 21 per cent over the previous fiscal year.
Net profit rose to $181 million.
The company introduced more than 130 new products in the 2006 fiscal year, and shipped a record 143 million units.
For 28 consecutive quarters, Logitech also beat its own sales and profits records.