Logitech Considers Selling LifeSize Video Conferencing Unit

By Jeffrey Burt  |  Posted 2013-01-26 Print this article Print

Logitech bought LifeSize in 2009, at the tail end of the global recession and a time when the video conferencing business was booming, thanks to the strong adoption of video collaboration technology by businesses that wanted to find ways to increase employee productivity while driving down expenses, including traveling costs.

However, in recent years, the video conferencing market has slowed, with businesses buying fewer large, immersive telepresence systems and a shift in the space toward more software-based solutions. According to analysts at IDC, worldwide video conferencing revenue in the third quarter of 2012 declined 4.8 percent. Revenue for larger, multi-codec immersive telepresence systems showed the sharpest decline, with a 35.8 percent year-over-year drop, while sales of other components in video conferencing systems—including gateways and firewalls—dropped 26.8 percent.

There was some growth, in such areas as single-codec systems, personal video conferencing and sales of video multi-control units (MCUs), for multi-party video conferences.

IDC analyst Rich Costello said that economic concerns also played a factor, as were customer buying patterns. "We also feel that customers are considering more strategic approaches to deploying video technology and applications, leading to longer decision cycles,” he said in November.

Even as revenues decline, the market is getting more competitive. Established players like Cisco and Polycom continue to expand their offerings, while vendors like Avaya—which bought Radvision in 2012 to grow its video communications capabilities—and Huawei Technologies muscle into the space. In addition, there are a number of smaller companies—including Vidyo and Blue Jeans Networks—that also are gaining inroads.

However, some of these other vendors also are being impacted by the change in the market. Polycom officials reported Jan. 24 that fourth-quarter revenue came in at $353 million, a 9 percent decline over the same period in 2011.

Logitech CEO Darrell said he will aggressively move to cut costs beyond the $80 million that was targeted in April 2012 when the company announced restructuring plans. The company is also looking to sell other businesses—including its Harmony remote controls unit—as well as increase investment in products for tablets, smartphones and computer games.

“My goal is to get Logitech back to sustained profitability as quickly as possible,” Darrell said in a statement. “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.”


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