New York (CNN Business)When Apple unveiled its latest line of iPhones and its HomePod mini smart speaker earlier this month, the company notably removed many rival speakers and headphones from its online store.
But Logitech, a maker of mice and other peripherals that also used to have its audio products featured on Apple’s site, isn’t concerned.
Logitech (LOGI) shares surged more than 15% Tuesday after the company reported earnings and sales that easily topped Wall Street’s forecasts and issued a rosier outlook for 2021. The stock has now more than doubled this year and is not far from an all-time high.
Apple (AAPL) may be looking to generate more revenue for its own audio products, which, in theory could hurt Logitech as well as rivals Bose and Sonos (SONO). But Logitech is not dependent on Apple — or the music business — for most of its sales.
Revenue from speakers and headphones only make up about 12.5% of Logitech’s total sales. And sales of mobile speakers actually fell 24% from a year ago in the most recent quarter.
Logitech CEO Bracken Darrell said in an interview with CNN Business that he’s not concerned about Apple’s internal speaker and headset push (Apple also owns Beats).
“We already decided to redeploy some of our investments out of the speaker category. It’s no longer a big priority at all,” Darrell said.
“We would be crazy to compete with Apple. We’re just a little mouse company and we want to help make their customer experience better. We feel the same way about Google and other big tech competitors,” he added.
Video conferencing and esports lifting sales
Many of Logitech’s other products are still available on Apple’s website.
Logitech, which also sells keyboards, webcams, video conferencing tools and gaming accessories, is benefiting from two other big trends — the fact that more people are working from home during the pandemic and the explosive popularity of esports.
Revenue from gaming — things like keyboards, joysticks, steering wheels and other controllers — soared 85% in its most recent quarter while video collaboration sales more than doubled. These two product lines are Logitech’s biggest, accounting for 42.5% of total sales.
“Video conferencing is a long-term trend. We expect all conference calls to eventually be done by video and the pandemic is accelerating that,” Darrell said.
Look no further than the explosive rise of Zoom Video Communications (ZM), whose shares have skyrocketed more than 700% in 2020, for evidence of that.
But gaming is also boosting Logitech’s fortunes.
“There is no end in sight to the boom in gaming. There is no reason why esports won’t keep growing and eventually become even bigger than traditional sports,” Darrell said.
And with 5G technology being rolled out more aggressively across the US, Darrell said that he expects demand for gaming products to keep growing rapidly
“It’s still so early in the deployment of 5G that it’s not a big factor for us yet,” Darrell said. “But 5G will eventually make gaming easier and able to be played at a completely different speed.”
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