Logitech Selling Harmony Division After ‘Unacceptable’ Q3 Results
Logitech CEO Bracken Darrell calls Q3 financial results "unacceptable," saying the company will discontinue "non-strategic products" by the end of 2013.
Logitech posted its financial results for Q3 of its 2013 fiscal year, calling the results “unacceptable.” The company made an operating loss of $180 million off sales of $615 million. Retail sales were down 14 percent year on year, and CEO Bracken Darrell plans to discontinue “non-strategic products” by the end of 2013.
“These results are unacceptable and we are taking decisive action as an outcome of my strategic review,” says Darrell. “I was pleased with the continued strong demand for our Ultrathin Keyboard Cover in Q3. We plan to expand our presence in the growing tablet accessories category with the launch of a number of exciting new products later this quarter.
“We are taking immediate actions to shape a faster and more profitable Logitech. We are developing more mobility-related products, leveraging the powerful growth of tablets and smartphones. 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.
“As we execute our plans over the coming quarters, we will reduce costs significantly across the company beyond the $80M annual cost savings (FY 2014 over FY 2012) resulting from the restructuring we announced last April. My goal is to get Logitech back to sustained profitability as quickly as possible. This requires unwavering focus on developing great products both for large and for fast-growing markets, removing unnecessary costs and a commitment to move at least as fast as the markets in which we participate.”
Logitech launched in Oct. 2012 its first new Harmony remote in two years, the Harmony Touch. At a time when every new product has its own control app, and app-based remotes (including Harmony’s own remote app) have become popular and inexpensive, the challenge of selling high-end remotes apparently has gotten too difficult to sustain.
We hope and assume the company will continue to support products currently on the market. Harmony’s database of control codes surely has value to some prospective buyers, so I don’t expect this will be the end of Harmony remotes.
Possibly one problem Harmony had is that it’s stuck to an old model of IR control. So many of today’s devices now incorporate IP connection, and homeowners increasingly want to have their entertainment system integrated with other systems in the house, such as lighting. That’s a task largely beyond the capability of a remote such as Harmony makes, but is obviously possible with the more reliable control systems offered by companies like Control4, Crestron, Savant, URC, Elan and RTI.
Grant Clauser is a technology editor, covering home electronics for more than 10 years for such publications as Electronic House and Dealerscope. He's done ISF-level damage to hundreds of reviewed products and has had audio training from Home Acoustics Alliance and Sencore. Have a suggestion or a topic you want to read more about? Email at [email protected]
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