Logitech Formally Exits OEM Mouse Market
by 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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cjb110 - Saturday, January 23, 2016 - link
It's news because everyone who has used a PC has used either a Microsoft or Logitech based mouse at some point. These OEM mice were always far better than any other OEM brand.chrnochime - Saturday, January 23, 2016 - link
Yes just because you think this news is not worth posting means AT should not post it.Azethoth - Sunday, January 24, 2016 - link
Not sure why you bothered reading this interesting article or replying to it. Logitech is central to the PC industry and has been for decades.Do you really think the average person reads AnandTech?
So many questions, so little time.
Mushkins - Friday, January 22, 2016 - link
For anyone hit with that lovely sense of panic, be aware that this is *OEM* mice. AKA the little crappy ones PC manufacturers bundle with new computers. They're still making all of their gaming lines of mice.Ammaross - Friday, January 22, 2016 - link
Doesn't help they included a picture of a premium MX Master mouse (which obviously isn't OEM)...Flunk - Friday, January 22, 2016 - link
Well, that's a shame. They were probably the only brand of OEM mice that weren't garbage.Mr Perfect - Saturday, January 23, 2016 - link
The Microsoft scroll wheel opticals are actually pretty nice. Assuming they still make them. I was getting them two or three years back with new systems, but then we switched to Dell PCs and those do come with cheap and nasties.Actually, it might have been a Logitech with the Dells. If so, then Logitech's OEM parts where really cutting corners to get that margin. It might be better to stop producing crap under OEM if it'll dilute the brand.
ioconnor - Friday, January 22, 2016 - link
They only offer three year warranties on their mice. Most bargain basement mice cost less than $5 and have lifetime warranties. So it's only natural they are exiting.Now on the high end their mice fail too. However most people will continue buying so as to match their keyboards. If it were not for this Logitech would probably exit the mice market entirely.
Now if they simply built better quality products and gave lifetime warranties they would not have these financial troubles. Unfortunately they seem to be influenced by Harvard MBAs who think built in obsolescence is financially better. Short term profits, long term death...
DanNeely - Friday, January 22, 2016 - link
A warranty on a $5 mouse where you'd have to pay $10 to ship it to the manufacturer to get your replacement might as well not exist; especially since they can probably count on 99.9% of customers forgetting about the register your purchase in 90 days requirement to get the extended warranty. They can offer the world because they know there won't be a meaningful number of claims ever made against it.Flunk - Friday, January 22, 2016 - link
You're talking about retail products, they're exiting OEM production. This has nothing to do with any of their retail products, low-end or not.Also, I've had a number of high-end Logitech Mice over the last 20 years and all of them have been fantastic. The ones I haven't accidentally destroyed (or been destroyed by my evil cat) lasted very well. In fact, not counting the one destroyed by my evil cat I've only need to buy 2 mice in the last 10 years.