Logitech Formally Exits OEM Mouse Marketby Anton Shilov on January 22, 2016 12:00 PM EST
In a bit of news that is a sign of the times, this week Logitech announced that it had completed its exit from the OEM mouse business. The company no longer sells OEM mice, which for a long time accounted for a large portion of Logitech’s revenue. Instead the company will continue to focus on new categories of premium products for retail markets.
Logitech was among the first companies to mass-produce computer mice back in the eighties. For decades, its mice were supplied with PCs made by various manufacturers and for a long time Logitech’s brand was synonymous to pointing devices. In fact, Logitech’s U96 is among the world’s most famous optical mice since it was bundled with millions of PCs. However, a lot has changed for Logitech in recent years. As sales of desktop PCs began to stagnate in the mid-2000s and the competition intensified, OEM margins dropped sharply. At some point, OEM business ceased to make sense for Logitech: there was no growth and profitability was minimal.
Last March the company announced plans to stop selling OEM devices, and in December Logitech made its last-time shipments, entirely depleting its inventory. Sales of OEM hardware accounted for about 4.45% of the company’s revenue in Q3 FY2016, which ended on December 31, 2015. Due to razor-thin margins, Logitech’s OEM business was not exactly something that could be sold for a lot, according to the company. Moreover, it did not make a lot of sense for Logitech to sell it and license the brand to a third party.
Logitech has been expanding its product portfolio for many years now and while mice, trackballs and keyboards remain three key types of products for the company, they no longer account for the lion’s share of Logitech’s revenue. The manufacturer recognizes gaming gear (which includes mice, keyboards, speakers, headsets, controllers and other devices), mobile speakers, video collaboration as well as tablet and other accessories as its key growth categories of products. Net sales of Logitech's growth category products totaled $224.87 million in Q3 FY2016, net sales of traditional devices totaled $368.87 million, whereas OEM business brought only $26.512 million in revenue. The lack of OEM mice in Logitech's portfolio will be offset by growing sales of other products.
Ultimately even though Logitech stopped to sell cheap mice to producers of PCs, Logitech remains one of the world’s largest suppliers of pointing devices and keyboards, and many premium personal computers still come equipped with the company’s advanced keyboards and mice designed for gamers. These days the company has also taken on a more well-rounded portfolio, with significant presences in speakers, PC headsets, webcams, remotes and other devices.
Source: Logitech Investor Relations
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CJ_Jacobs - Friday, January 22, 2016 - linkNot sure why this is newsworthy. I don't think the average person knows or cares who makes the mouse/keyboard that comes with their PC. It's labled with the PC maker's name anyway so they probably assume that's who makes it. And those who care about having a quality mouse/keyboard tosses the OEM stuff in the garbage the moment they unbox their new PC.
RazrLeaf - Friday, January 22, 2016 - linkIn all fairness to OEM mice, they make decent spares.
DanNeely - Friday, January 22, 2016 - linkAgreed. I don't know who makes them; but the various Dell branded optical mice I've used at work over the years have all worked well. They're nothing flashy, and for gaming I'd want something with a higher DPI; but they get the job done.
nathanddrews - Friday, January 22, 2016 - linkI have to say that ever since the move from ball to optical mice, I haven't noticed the difference between any OEM mice or low-end Logitech mice. It points. It clicks. It works.
If anything, that's the perfect reason to leave that market and focus on mid-to-high end offerings where the margins are higher and the products can differentiate more.
naris - Friday, January 22, 2016 - linkThat's because the OEM mice probably were low end logitech mice.
BurntMyBacon - Monday, January 25, 2016 - link@naris: "That's because the OEM mice probably were low end logitech mice."
Err, ... , THIS!
Don't know about some of the OEMs, but I can verify this statement for most OEM Dell mice over the years as well as a few other PC OEMs.
BurntMyBacon - Monday, January 25, 2016 - link@DanNeely: "Agreed. I don't know who makes them; but the various Dell branded optical mice I've used at work over the years have all worked well."
The majority of Dell branded mice I've seen over the years were OEM relabeled Logitech mice. Lowend, nothing flashy, just enough to get the job done Logitech mice.
NeoteriX - Friday, January 22, 2016 - linkI found it a newsworthy little read. AnandTech readers are not the "average" person, and this is another data point in the bigger (and quite relevant) picture of the decline of the PC.
Valantar - Friday, January 22, 2016 - linkPartially agreed, although I think you sound a bit too gloomy. It's an interesting perspective on the evolution of the PC peripherals market and how it plays into the PC market in general. Sure, PCs are in decline, as many people simply don't need them. But gaming- and high end peripherals (and computers) are growing in popularity and sophistication. It's all a sign of a maturing product category.
DarkXale - Friday, January 22, 2016 - linkNot really. Its a pointer to the increasing prevalence of Laptops (where OEM mice aren't included), and a continuing growth in the high-end market.
Logitech's Tablet accessory division declined by 35%.