Logitech Dropping Harmony this Year (2013)

[Melbosa]

Soruce: http://news.logitech.com/press-release/corporate/logitech-announces-third-quarter-results-fy-2013

NEWARK, Calif. & MORGES, Switzerland--(BUSINESS WIRE)--Logitech International (SIX: LOGN) (Nasdaq: LOGI) today announced financial results for the third quarter of Fiscal Year 2013.

Sales for Q3 FY 2013 were $615 million, down 14 percent from $715 million in Q3 FY 2012, with no material impact from exchange rates. The company posted an operating loss of $180 million, which included a non-cash goodwill impairment charge, estimated to be $211 million, announced on January 22, 2013. Net loss for Q3 FY 2013 was $195 million ($1.24 per share) compared to net income of $55 million ($0.32 per share) in Q3 FY 2012. Gross margin for the quarter was 34.2 percent, compared to 36.2 percent in the same quarter one year ago. Excluding the aforementioned Q3 FY 2013 impairment charge, Q3 FY 2013 non-GAAP operating income would have been $31 million and non-GAAP net income would have been $16 million.

Logitech?s retail sales for Q3 FY 2013 decreased by 14 percent year over year, down 8 percent in the Americas, 11 percent in Asia and 20 percent in EMEA. Year over year, OEM sales decreased by 23 percent and sales for the LifeSize division decreased by 4 percent.

?As we articulated when we started the third quarter, continued weakness in the global PC market was the primary factor in our disappointing Q3 results,? said Bracken P. Darrell, Logitech president and chief executive officer. ?These results are unacceptable and we are taking decisive action as an outcome of my strategic review. 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,? continued Mr. Darrell. ?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.?

Mr. Darrell concluded, ?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.?

Prepared Remarks Available Online

Logitech has made its prepared written remarks for the financial results teleconference available online on the Logitech corporate Web site at http://ir.logitech.com. The remarks are posted in the Calendar section on the Investor home page.

Financial Results Teleconference and Webcast

Logitech will hold a financial results teleconference to discuss the results for Q3 FY 2013 on Thursday, Jan. 24, 2013 at 8:30 a.m. Eastern Standard Time and 14:30 Central European Time. A live webcast of the call will be available on the Logitech corporate website at http://ir.logitech.com.

About Logitech

Logitech is a world leader in products that connect people to the digital experiences they care about. Spanning multiple computing, communication and entertainment platforms, Logitech?s combined hardware and software enable or enhance digital navigation, music and video entertainment, gaming, social networking, audio and video communication over the Internet, video security and home-entertainment control. Founded in 1981, Logitech International is a Swiss public company listed on the SIX Swiss Exchange (LOGN) and on the Nasdaq Global Select Market (LOGI).

This press release contains forward-looking statements within the meaning of the federal securities laws, including, without limitation, statements regarding: demand for our products, expansion of our presence and growth in the tablet and smartphones accessories category, new product launches, our plans to divest or discontinue non-strategic products, our focus, and our ability to be faster and more profitable, to achieve sustained profitability, to sustain our leadership and advantages in PC platform-related products, and to reduce costs. The forward-looking statements in this release involve risks and uncertainties that could cause Logitech?s actual results and events to differ materially from those anticipated in these forward-looking statements, including, without limitation: if our product offerings, marketing activities and investment prioritization decisions do not result in the sales, profitability or profitability growth we expect, or when we expect it; the demand of our customers and our consumers for our products and our ability to accurately forecast it; if we fail to innovate and develop new products in a timely and cost-effective manner for our new and existing product categories; if we do not successfully execute on our growth opportunities in our new product categories and sales in emerging market geographies; if sales of PC peripherals in mature markets are less than we expect; the effect of pricing, product, marketing and other initiatives by our competitors; if our products and marketing strategies fail to separate our products from competitors? products; if the restructuring fails to produce the intended performance and cost savings results or is not implemented in the contemplated timeframe. A detailed discussion of these and other risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in Logitech?s periodic filings with the Securities and Exchange Commission, including our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2012, available at www.sec.gov, under the caption Risk Factors and elsewhere. Logitech does not undertake any obligation to update any forward-looking statements to reflect new information or events or circumstances occurring after the date of this press release.

Logitech, the Logitech logo, and other Logitech marks are registered in Switzerland and other countries. All other trademarks are the property of their respective owners. For more information about Logitech and its products, visit the company?s Web site at www.logitech.com.


LOGITECH INTERNATIONAL S.A.

This is very sad for me.  I have 2 devices in my house that are used daily.  I will be very sad to see the Customer Driven DB die as well, as I've not seem a collection like that by any of the other Programmable Remotes on par with Harmony.

[Thorin]

I'm surprised they think they're not making money on these remotes.

Or maybe it's that they're not making enough money, since they're talking about expanding into tablet-based and smartphone-based hardware and software.  Most companies expanding into tablet/smartphone markets think this is where they'll see rapid growth rather than organic growth.

Any idea who the remote control division is being sold off to?

[Melbosa]

Well that press release is pretty recent.  We should keep our eyes out for whom it sells to (if at all) or alternatives.  I know eventually I'll buy a new receiver and damned if I want to manually program my remote like the old days.  Too spoiled with the computer interface stuff...

[Thorin]

Well, I wouldn't say that the Harmony software spoiled us, it was horribly, horribly, slow, and then they switched to myharmony.com and it was still damn slow (and had less features).

This engadget post indicates they plan to continue support until the sale is complete, which implies that whoever they're selling to will keep the servers running: http://www.engadget.com/2013/01/23/logitech-q3-earnings-selling-harmony-remotes/

[Mr. Analog]

I think the increasing popularity of tablets / smart phones is what will kill a stand alone remote like Harmony. I see this as bailing out of that situation before it happens.

I mean why buy a gizmo when you can just download an App that controls your TV?

[Tom]

I think the increasing popularity of tablets / smart phones is what will kill a stand alone remote like Harmony. I see this as bailing out of that situation before it happens.

I mean why buy a gizmo when you can just download an App that controls your TV?

Assuming you have a tv capable of that. Or a phone with an IR blaster.

[Mr. Analog]

I think the increasing popularity of tablets / smart phones is what will kill a stand alone remote like Harmony. I see this as bailing out of that situation before it happens.

I mean why buy a gizmo when you can just download an App that controls your TV?

Assuming you have a tv capable of that. Or a phone with an IR blaster.

Both are increasingly common.

[Thorin]

I think the increasing popularity of tablets / smart phones is what will kill a stand alone remote like Harmony. I see this as bailing out of that situation before it happens.

I mean why buy a gizmo when you can just download an App that controls your TV?

Because the gizmo is easy to use and doesn't break when you throw it at the wall or jump on it or sit on it?  Because the gizmo costs half to a quarter as much as the tablet, and when the tablet is in use you no longer have a remote?  Because the gizmo makes more sense (thanks to looking familiar) to less-computer-literate people?

I have a tablet, my kids used it, now the screen is busted.  I have a Harmony remote, my kids used it, it still works.  And my mother used it and figured out how to turn the TV/PVR/receiver on and off and could troubleshoot when one of them didn't switch on with the Help button.  If I hand her a tablet to control her TV, she'll just go read a book.

[Melbosa]

Yeah I have to agree with Thorin... most of my family won't use a tablet to control their tv and movies but will use a remote.

[Mr. Analog]

Soooo if you had the same interface on your iPhone or Android you'd still reach for the remote?

Either way it won't matter soon

[Darren Dirt]

http://www.engadget.com/2013/01/23/logitech-q3-earnings-selling-harmony-remotes/

In Chrome I searched for just the word "Harmony" and there's 53 hits; 4 were in the article -- the rest are in the comments... Verbiage like "great" and "long-lasting" and "4 years ago, still works and I still love it" = looks like many sadfaces.

[Tom]

http://www.engadget.com/2013/01/23/logitech-q3-earnings-selling-harmony-remotes/

In Chrome I searched for just the word "Harmony" and there's 53 hits; 4 were in the article -- the rest are in the comments... Verbiage like "great" and "long-lasting" and "4 years ago, still works and I still love it" = looks like many sadfaces.

That right there is probably part of the problem. They didn't make anything compelling enough to make existing harmony users upgrade after they got their last harmony.

[Melbosa]

Soooo if you had the same interface on your iPhone or Android you'd still reach for the remote?

Either way it won't matter soon

Not that it would work for me - I think RIM is dead for consumer apps... But I don't have my phone on me most times at home anymore.  Not since I have it blue-toothed to the house phone.  So yesah I guess I would reach for the remote first.

But you are right... Time may decide that for us all!

[Melbosa]

Good point Tom!  Maybe they were too good!

[Tom]

Good point Tom!  Maybe they were too good!

I know mine works more or less well enough to not need to upgrade. I might have upgraded if it kept crashing.. but it seems the problems were due to a misconfiguration. I deleted some unused settings and cleaned up the existing settings, and things got a lot better.