Logitech

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Logitech International S.A.
Type Public Limited Multinational
Founded 1981
Headquarters Romanel-sur-Morges, Switzerland
Key people Guerrino De Luca (President and CEO), Mark J. Hawkins (SVP, Finance and Information Technology, and CFO)
Industry Consumer electronics
Products PC peripherals, keyboards, mice, webcams, mp3 players, speakers, mobile phones, game controllers.
Revenue $2,370,496,000 USD (2008)
Operating income $ 286,680,000 USD (2008)
Employees 8,000
Website www.logitech.com

Logitech is one of the world’s leading providers of computer peripherals: its number of employees surpasses 8,000, its products are sold in more than 100 countries and are used for gaming consoles, home-entertainment systems, personal computers, iPod/MP3 players, and mobile phones, which it distributes through retailers as well as through major computer manufacturers [1] In 2009 Business Week Online reported that computer mice made up almost 24% of Logitech's sales and keyboards account for 17% [2].

Company history

Logitech is the brainchild of college friends Daniel Borel and Pierluigi Zappacosta, who met at Stanford University, in Palo Alto, California. They originally worked together on a word-processing system which they sold as a prototype to the Swiss company Bobst. Shortly thereafter, Borel and Giacomo Marini, a former Olivetti engineer and friend of Zappacosta, undertook a collective business venture: they founded Logitech S.A., on Oct. 2, 1981, and opened its first office in Apples, Switzerland. [3]

Logitech's first commercially successful product was the computer mouse, a "pointing" device that served as a navigation aid for a graphical computer interface. In 1982, the company introduced the P4 Mouse, the company’s first hardware device. In Sept. 1986, the company moved its Swiss headquarters from Apples to Romanel. The initially modest, but ever-growing mice sales paved the way for up-and-coming Logitech to begin expanding its global operations and worldwide presence: in April 1988, Logitech Ireland was created.[citation needed]

In July 1988, Logitech decided to go public to help finance its growth, as well as consolidate its manufaturing strategies in China and begin to move beyond mice production and begin marketing other types of computer peripherals. That same year, the company introduced a handheld scanner, the first of several varieties of scanners it would eventually manufacture. In 1992, Logitech introduced FotoMan, an early digital still camera that sold for just under $1,000. Also in 1992, Logitech brought to market AudioMan, a speaker/microphone that enabled people to insert audio clips into certain applications. And in 1994, the company introduced WingMan, its first gaming peripheral – a joystick – for a growing PC game market. In 1995, Logitech launched VideoMan, a Web camera on a flexible arm. In February 1998, Guerrino De Luca became Logitech’s CEO. That same year, the company acquired the hardware division of Connectix, the manufacturer of the QuickCam line of webcams.[citation needed]

Since then, Logitech has been undertaking a series of important joint ventures and business associations that have allowed it to become involved in the development of PC speakers, headsets for gaming platforms and mobile phones, a line of speakers and headphones for the iPod and other portable music devices, as well as a vast array of wireless music products. Template:Ract

Logitech has sold more than 700 million mice, and its product lines extend into keyboards, Web cameras, voice headsets, speakers, headphones, game controllers and remote controls[4]

Historical financial information

All information is presented in U.S. dollars, unless indicated otherwise. [5]

2007 2006 2005 2004
Revenue (thousands of USD) $2,066,569 $1,796,715 $1,482,626 $1,268,470
Gross margin percent 34.3% 32.0% 34.0% 32.2%
Operating Income (thousands of USD) $230,862 $198,911 $171,674 $145,554
Net income (thousands of USD) $229,848 $181,105 $149,266 $132,153


2008[6]

2008
Revenue (thousands of USD) $2,370,496
Gross margin percent 35.8%
Operating Income (thousands of USD) $286,680
Net income (thousands of USD) $231,026


Business strategy

In March 2009 Yehia Oweiss, regional director at Logitech UK, announced a plan to create and strengthen partnerships with major distributors, such as Ingram Micro, Tech Data, Gem, Enta and VIP. Oweiss mentioned outreach to resellers, particularly small business resellers, as well as first-time retailers.[7]

Political and Public Influence

Political contributions

Lobbying

Corporate accountability

Logitech considers itself a "responsible global corporate citizen" that recognizes "the importance of conserving the earth’s precious natural resources to protect the planet", thus engaging "in a process of ongoing improvement to sustain and protect the environment"[8] .

To learn more about Logitech's Environmental Responsibility activities please click here

Logitech also recognizes having an important responsibility towards its employees, suppliers and partners, as well as towards the communities in which it operates. To comply with such responsibilities, it is an active member and supporter of the EICC, or Electronic Industry Code of Conduct[9], a global rule-book adopted and implemented by some of the world’s major electronics brands and their suppliers. The goal is to improve conditions in the electronics supply chain.

Labor

A PDF file explaining Logitech's business ethics agreements for employee's states: "Logitech, its Employees and its suppliers must strictly comply with all local human rights laws for all countries in which Logitech or its suppliers do business. Further, Logitech holds itself and its suppliers of goods and services to a standard that prohibits the use of forced labor, child labor, and unsafe working conditions."[1]

Human rights

Environment

Logitech's Web site claims compliance with the Social and Environmental Code of Conduct (EICC)[2], which includes internal policy making and staff training about the issues of environmental protection, health and safety, and fair labor practices.

More specifically, Logitech breaks down its environmental initiatives into the several commitments on a Product Stewardship [3] page on its Web site.

These commitments deal with the actual products Logitech distributes as well as the packaging and batteries associated with products. The company’s Waste Electrical and Electronic Equipment (WEEE) Directive encourages the recycling of the hardware of Logitech products.

The Web site also maintains that Logitech is in compliance with the European Union’s WEEE (Waste from Electrical and Electronic Equipment) Directive[4], which restricts the use of hazardous substances in electrical and promotes the recycling of these goods. WEEE has been in place since February 2003.

Logitech puts these commitments into pratice in the following ways, as reported by the company's Web site:

  • Battery Recycling Initiatives: Programs to encourage consumers to recycle the batteries and packing of Logitech products are in place in Ontario, Canada and in some of the EU member states, such as the Netherlands and Germany. [5]
  • Resource Reduction: The Logitech Web site claims to limit the number of resources that go into each product, but the pratices and results of this initiative remain unclear:

"Logitech has redesigned its packaging for a number of products to reduce the amount of materials used. These activities have positively impacted resource and energy reduction in the manufacture and logistics life cycle elements for these products."[6]

  • Materials Selection, Substitution and Elimination: Logitech bans the following chemicals:
    • Cadmium (Cd) -- above 100 PPM
    • Lead (Pb) -- above 1000 PPM
    • Mercury (Hg) -- above 1000 PPM
    • Hexavalent Chromium (Cr+6 , Chromium VI) -- above 1000 PPM[7]

As of July 1, 2009, this statement on the Web site has not been updated: "Our goal is to eliminate all remaining uses of PVC (Polyvinyl Chloride in packaging materials) by the end of 2008."[8]

The Web site also claims to be in compliance with the EU RoHS directive (European Directive on the Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment) as well as the state of California's Proposition 65. [9]

  • Energy Efficiency: Logitech claims that improvements in cordless devices since 2005 have extended battery life and made certain products more energy efficient. The names of these products and other data were not available. [10]

Consumer Protection and Product Safety

Logitech clearly marks the packaging and intructions sheets of products when the product may be harmful to consumers when not properly disposed of, and encourages proper disposal and recycling of batteries and plastics.[11]

Anti-Trust and Tax Practices

Social Responsibility Initiatives

Business Scope

Logitech’s product lines include control devices (keyboards, mice, trackballs, digital writing solutions, and advanced universal remote controls), video communications products (webcams and applications), interactive entertainment products (gaming controllers and mobile gaming accessories) and audio products (multimedia speakers and headsets for gaming, music, Internet voice access, mobile phones, and portable music players). The computer devices work with PCs and Macs, but are sometimes specially designed for iPods or other Mac extensions [10].


Logitech in a faltering economy (July 2009)

At the end of December 2008, Logitech reported a 15% drop (to $627 million) in sales [11]. A recent Business Week Online article posited that consumers are “trading down” this year[12], and predicted Logitech’s sales would continue to fall in 2009.

Later in January 2009 representatives from Logitech reported that between 550-600 jobs would be cut from the global holding company, in response to falling sales [13].

Logitech had previously made forecasts for the 2009 fiscal year of 6 to 8 percent sales growth and operating income growth of 3 to 5 percent. In early January 2009 *Gerald P. Quindlen said the company had a strong cash position, was not in debt, and would maintaining market share. [14]

Governance

Board of Directors

[citation needed]

Senior Management

Contact information

Corporate Offices
Americas Headquarters
6505 Kaiser Dr.
Fremont, CA 94555 USA

Phone: +1 510-795-8500
Website: www.logitech.com

Articles and resources

Books on the company

Related SourceWatch articles

Sources

  1. Logitech, "Logitech Profile and History", Logitech Website, PDF Document, pg.1, Accessed December 2008
  2. Hesseldahl, Arik. "Logitech's Crummy Earnings: A Bad Omen." Business Week Online 21 Jan. 2009: 2-2. Print.
  3. Logitec, "The Logitec Story", Logitech website, accessed June 2009.
  4. Logitech, "Logitech Profile and History", Logitech Website, PDF Document, pgs 1-5, Accessed December 2008
  5. Logitech, "2008 Logitech Annual Report: Historical Financial Information years 2004-2007", pg.22, taken from the Logitech Website, Accessed December 2008
  6. Logitech, "2008 Logitech Annual Report", pg.22, taken from the Logitech Website, Accessed December 2008
  7. Yirrell, Sara. "LOGITECH VOICES DESIRE TO BROADEN UK RESELLER BASE." Www.channelweb.co.uk. N.p., 2 Mar. 2009. Web. 1 July 2009.
  8. Logitech, "Logitech's social and environmental reponsibility policies", Logitech Website', Accessed December 2008
  9. Electronic Industry Citizenshit Coalition,"Electronic Industry Code of Conduct", Website accessed December 2008
  10. Palmer, Will. "Audio: Logitech Pure-Fi Anywhere." Outside Summer 2008: 64-64. Print.
  11. Hesseldahl, Arik. "Logitech's Crummy Earnings: A Bad Omen." Business Week Online 21 Jan. 2009: 2-2. Print.
  12. Hesseldahl, Arik. "Logitech's Crummy Earnings: A Bad Omen." Business Week Online 21 Jan. 2009: 2-2. Print.
  13. "Logitech Eliminates 550+ Jobs After Sales, Profits Flag In Q3." TWICE: This Week in Consumer Electronics 26 Jan. 2009: 49-49. Print.
  14. Associated Press. "Logitech cuts staff by 15pc." The New Zealand Herald 7 Jan. 2009, General ed., Technology sec.: n. pag. Print.
  15. Hesseldahl, Arik. "Logitech's Crummy Earnings: A Bad Omen." Business Week Online 21 Jan. 2009: 2-2. Print.
  16. "Logitech Eliminates 550+ Jobs After Sales, Profits Flag In Q3." TWICE: This Week in Consumer Electronics 26 Jan. 2009: 49-49. Print.

External resources

External articles