July 20, 2011 / 8:01 AM / 6 years ago

Logitech video unit in mobile, services push

* Starts to offer video conferencing as a service

* Buys Italian firm Mirial for enterprise, mobile offering

* Sees rapid growth, significant role for service business

* Sees ‘virtually all new added revenue’ from service sales

By Tarmo Virki, European Technology Correspondent

HELSINKI, July 20 (Reuters) - Logitech unveiled on Wednesday a push into videoconferencing services and the acquisition of Italian firm Mirial to tap into growing demand for mobile video services.

Craig Malloy, co-founder and chief executive of Logitech’s LifeSize unit, said he expects to see a sales boost from the new services offering, which enables videoconferencing usage based on monthly fees, without clients buying expensive equipment.

“We see it, rather than cannibalisation, as virtually all new, added revenue to us,” Malloy told Reuters in an interview.

“It is going to start small for us and then grow rapidly. It is going to be a significant part of our business.”

Malloy said he expects such web-based videoconferencing services to have a major impact on the industry.

“We see a disruptive pattern in the growth trajectory.”


Logitech said it had agreed to buy a 12-year old privately-held Italian videoconferencing firm Mirial for an undisclosed sum.

The acquisition of Mirial -- which was founded 12 years ago and has fewer than 25 employees -- gives LifeSize a product for enterprises desktop videocalling, something it has missed so far, and expands its offering to mobile phones and tablets.

Research firm Ovum sees the $3 billion market for videoconferencing gear growing an average 6 percent a year through 2016, with the take-up of desktop applications hitting sales of cheaper conferencing room equipment.

“We have gone from having a product gap to having a significant lead,” said Malloy, adding the company’s key rivals are yet to introduce offerings for mobile devices, which are increasingly popular in enterprises.

“Tablets, iPads in particular, are creeping into enterprises and are replacing laptops,” he said.

Logitech, maker of computer mice, speakers, webcams and keyboards, bought Lifesize for $405 million in 2009. Wider take-up of videoconferencing could also boost sales of its webcams.

The growing market has spurred a wave of acquisitions in the sector, with Cisco splashing more than $3 billion on Norwegian firm Tandberg, and Polycom buying HP’s videoconferencing unit only last month. (Editing by Hans-Juergen Peters)

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