Robin Selden joined Logitech International SA as vice president of product marketing in 1998, one month after CEO Guerrino De Luca came aboard. So while the 44-year-old Seldon can rightfully claim much of the credit for the numerous innovative gadgets emerging from Logitech in the past six years - gadgets that have helped it nearly quadruple sales - she modestly defers to De Luca, who was global marketing chief for Apple Computer Inc., another company with something of a reputation for high-tech bling.
"The passion for good design comes from the top," Seldon said. "Something that is merely gimmicky or cheap is not well-rewarded in our company culture."
That wasn't always true. Founded in 1981 by a Swiss-born, Stanford-educated entrepreneur, Daniel Borel, Logitech started making computer mice right when Macintoshes and PCs running Windows took off. By the mid-1990s, Logitech was the leader in the low-cost, high-volume market for computer mice, having sold 100 million mice worldwide.
But it faced a challenge from Asian manufacturers that were starting win the price game. In anticipation, Logitech had begun trying to innovate. It introduced its first modern wireless mouse in 1991, its first Webcam a year later. But with consumers upgrading their PCs every three and four years - and getting a new mouse and keyboard with it - the future didn't look bright for Logitech.
Within the past half-decade, in a market with no shortage of cheap, good-quality peripherals makers, Logitech has perfected a formula that has kept it on top while it has grown sales and profit margins. Logitech's revenue was nearly $1.5 billion last year, up from $448 million in 1999; net income has grown more than twentyfold to $171 million in the same period.
Mice remain Logitech's best-selling and most profitable product line, but now they also serve as an introduction to consumers looking to add or upgrade joysticks, Webcams, PC speakers and headphones, mobile phone headsets - even television remote controls.
Selden's philosophy for all of Logitech's products is simple: sleek but understated design combined with truly useful new features. A two-fer is something like using rubberized paint, which provides a better mousing grip and also looks cool. It avoids cool for cool's sake, a tendency that sometimes even afflicts Apple, which can hit it out of the ballpark with the iPod but also strike out miserably with things like its much-reviled tiny, round iMac mouse from several years ago.
While Selden trusts the intuition of Logitech's designers, who are encouraged to suggest new products, she also relies on surveys and focus groups. Through them, Logitech found out that many hardcore gamers - a key market - were dismantling their mice to add small weights to fine-tune the heft and feel. Logitech just released its $69 G5 Laser Mouse that comes with a removable tray where gamers can add weights the size of a watch battery to adjust the balance.
For any given product, Logitech faces a formidable slew of competitors, with Microsoft Corp. and Singapore's Creative Technologies Ltd. often getting the better of Logitech. But Logitech is still winning the war through its disciplined blanketing of all market segments. Thus, Logitech offers 32 different computer mice, for hands big and small, for PC owners and notebook users, for those willing to splash out $100 for a wireless mouse and for others for whom a basic $10 corded model works just fine. In keyboards, Logitech offers 20 different keyboard-and-mouse combinations. Logitech even sells eleven different mobile phone headsets.
While cynics might say the actual difference between a $10 mouse and a $100 one is too small to justify the yawning price chasm, the market strongly disagrees. More than 50 million Logitech-branded products were sold last year. Hit products such as its $40 cordless optical mouse sell more than a million units in a year, while mere successes still ship between 100,000 and 500,000 units worldwide.
But consumers are ever getting younger and pickier. Whether Logitech will be able to maintain its profits in an era of diminishing returns for any given product is a challenge that Selden is eager to face.
"Youth are interested in the latest thing," she said. "So we plan to be quick and nimble to stay in tune with them, and speed up our development cycle."
This is cache, read story here
