Merits of exploring new areas of growth

Gulf News: What regions has Logitech been expanding into?

Daverio: The key expansion that has been going on for the last few years has been in the Middle East. It's been towards Turkey, Ukraine, and Russia. Eastern Europe has been conquered already a few years back.

Gulf News: What type of growth rate does Logitech expect in the Middle East?

Daverio: For the last couple of years we've been targeting generically a 15 per cent growth rate around the world, and in most of the years we've actually grown faster than that. If you look at the way that breaks up in the region, we don't give all the numbers out, but we've been growing at similar rates in our region. Obviously the growth rate between Germany and the Middle East and Turkey are not the same, but they're all averaging out to 15 to 20 per cent. The fastest growing countries, in our region, exceed 100 per cent growth, and I'm not talking little peanut countries. If you go into some of these countries - the Middle East, Turkey, Ukraine, Russia - you get three-digit growth in countries like these.

Gulf News: Why is Logitech getting into consumer electronics?

Daverio: In a mature market it is hard for us to grow in PC peripherals at the rate that we want to grow. This company had two options. From a growth perspective, either we accepted the fact that our growth had gradually slowed down as our market share and penetration increased or we looked for other areas to grow in.

Gulf News: Where is the consumer electronics market heading for?

Daverio: There is that whole digital convergence phenomenon that people call the digital home. We are all sort of positioning ourselves in that digital living room.

Gulf News: What is Logitech doing in the MP3 peripherals market?

Daverio: For years already we've been selling 5.1, high-end super-powered PC speaker systems. The first comment was we must be selling these to gamers. But I'm going, "Are there that many gamers who will spend hundred of euros to buy these high-end speaker systems?" No. People realise that they have these gigantic music libraries on their PCs... but when they're at home, they think "why do I need my iPod. I can listen to it right off my PC?" That's why the market for PC speakers has gone high-end now.