How Logitech Plans to Double Sales in 5 Years

Motorola (NYSE: MOT  ) isn't the only company staking its future on Google (Nasdaq: GOOG  ) and its Android platform in a big way.

Logitech International (Nasdaq: LOGI  ) wants to just about double its sales in the next few years, and the Android-based Google TV is both the oregano and the basil in its recipe for success. In order to hit the lofty sales goal of $5 billion by 2014, PC peripherals like mice and keyboards no longer provide the growth juice Logitech needs.

The Swiss maker of PC accessories branched out into high-end TV remote controls in the middle of last decade, and Google TV is a logical extension of that grab for the living room. Logitech's products are usually built to support what the company calls "open ecosystems," of which the PC is the "ultimate" example and Android forms the advance guard of the next generation.

The move also feeds into Logitech's belief in Internet-based video as a business driver. Management subscribes to projections by Cisco Systems (Nasdaq: CSCO  ) that point to overall Internet traffic quadrupling in the next five years, led by online video streams and a significant load of real-time video. Cisco's Telepresence video conferencing products compete directly with Logitech's Vid solutions and a wide range of consumer cameras, so the two companies speak the same language. And yes, Cisco is launching an Android-based video conferencing tablet.

Logitech aims for aggressive targets including "mid-teens" sales growth rates and improved profit margins. Google TV gives the company an entry point into 60 million American households with HDMI-equipped TV screens, and peripherals around the basic hardware gives Logitech an additional sales opportunity.

This company is used to playing a supporting role to larger endeavors. Making a shift from the Microsoft (Nasdaq: MSFT  ) Windows ecosystem to Google's Android in general and Google TV in particular may sound tricky at first, and the lack of early enthusiasm for Google TV underscores that difficulty. But in the end, all Logitech really needs is that somebody makes the digital living room work so the company can flood the market with accessories for couch-bound media surfing.

It could be this Android thing, it could be Sony (NYSE: SNE  ) finally getting the message across that the PlayStation 3 is a great media hub, or it could even be Apple (Nasdaq: AAPL  ) making a big splash with the Apple TV someday. Either way, Logitech should find a way to join the leading media platform and make some money along the way.

Follow Logitech's quest for bigger and better business by adding the stock to your Foolish watchlist.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. Google and Microsoft are Motley Fool Inside Value picks. Google is a Motley Fool Rule Breakers choice. Apple is a Motley Fool Stock Advisor selection. Logitech International is a Motley Fool Hidden Gems pick. The Fool has written calls (bull call spread) on Cisco Systems. Motley Fool Options has recommended writing a covered strangle position on Logitech International. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Apple, Google, Logitech International, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.


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