April 25, 2013 / 7:52 AM / 5 years ago

Logitech videoconferencing arm to target SMEs after escaping axe

ZURICH, April 25 (Reuters) - Logitech International’s videoconferencing arm LifeSize will intensify its sales focus on small and medium-sized companies after surviving a strategic review and could produce positive core earnings this year, its parent said.

Bracken Darrell, who took the helm as chief executive of Switzerland and California-based Logitech at the start of the year, said in January that it would write down LifeSize’s value by more than half and would decide within 90 days whether to sell or close the business it bought in 2009 for $405 million.

“We made the decision after a pretty hard look at the market,” Darrell said on Thursday. “We’re going to reduce overall overheads and take it back to the small, competitive, hungry business it was when we bought it.”

The videoconferencing market is dominated by Cisco and Polycom, with China’s Huawei and ZTE also making inroads.

Logitech also announced a 12 percent year-on-year drop in sales to $469.1 million in its fourth quarter, to March 31, swinging to a net loss of $36 million from a $28 million profit a year earlier.

The company, which also makes speakers, webcams and keyboards, has been hit by the soft euro, a weak global economy and a shift in the computer industry - led by Apple’s iPhone - that means systems rely less on the peripheral components Logitech produces.

“In the EMEA region, a lot of the retailers took big inventory reductions, especially in western Europe, which is no surprise, but in the rest of the world we grew several of our businesses,” Darrell said after the results announcement.

“I didn’t expect that so early, so it’s a nice surprise.”

The company forecast revenue of $2 billion in the year to April 2014, against sales of $2.1 billion in this financial year.

Logitech will refocus on the computer gaming market after pulling back from that business three or four years ago.

“We believe we can be very successful. We are bringing more science into the segment, as gaming is all about speed, accuracy, precision,” Darrell said.

He also expects strong growth in the unified communications segment, where the company is working with Microsoft and Cisco on videoconferencing and voice-over-internet services that allow companies to slash communications costs.

“This is a revolution that will happen in all enterprises over time,” he said.

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