Chuck the digital cheat sheet, this remote does its homework

MATT HARTLEY

Globe and Mail Update

'The mouse for the digital house" is not the title of the latest Dr. Seuss book; it's a television remote control.

As Internet-enabled televisions and digital content streaming become more popular, the line between the PC and the TV is blurring. Whether through TiVo, Xbox 360 or a stand-alone wireless extender, consumers are increasingly choosing to watch and listen to their digital files on their TVs rather than on their computers.

That shift in viewing habits is significant, especially for Logitech International SA, a company built on mouses and keyboards.

The company realized a few years ago that if people start spending more time accessing content in their living rooms, they're going to need some kind of an equivalent input device.

Today, providing the tools for the digital living room not only represents a large part of Logitech's future, it's also the company's fastest-growing product line.

In 2003, Logitech's Ashish Arora found himself wandering the mammoth convention halls at the annual Consumer Electronics Show in Las Vegas, when he came upon a booth operated by a small Toronto-based company called Intrigue Technologies Inc. Intrigue was showing off its line of Harmony universal remote controls, which could be programmed to work with thousands of home entertainment devices through a PC connection.

The Harmony appealed to Mr. Arora, who had been looking for a way to bring Logitech's product line out of the home office and into the living room.

"I stopped to talk to their CEO and I think we walked away from the booth to get coffee," Mr. Arora recalls. "And in those few minutes I said 'You're going to win in this space and you're going to redefine universal remote controls and what a harmonious device can be.'" About a week later, Mr. Arora was on a plane headed for Toronto to begin the process of acquiring Intrigue. Today, Mr. Arora is at the helm of Logitech's Canadian operations, which have grown from a handful of sales employees to a force of 185 encompassing everything from product strategy to research and development.

In 2004 — the year the company acquired Intrigue — Harmony devices generated less than $10-million (U.S.) in revenue for Logitech.

Three years later, sales had reached nearly $92-million and last year revenue for the Harmony division topped $123-million.

Although Harmony devices remain the company's smallest product category — paling in comparison to the $622-million in revenue generated by the mouse division — Logitech believes the U.S. market for advanced remote controls could be worth as much as $2-billion within four years.

Logitech has developed an international reputation for identifying and developing niche peripheral product markets, whether it's creating an aftermarket for cordless mouses, webcams or microphone-equipped earphones used by video-game players.

The Harmony line complements that strategy, according to Rick Hanna, an equity analyst with Morningstar Inc.

"Logitech really looks for peripheral-type devices that enhance the utility of consumer electronics and high technology products," he said. "They're really helping to build the market. It's not a huge part of their overall portfolio, but it is certainly one that has been growing," he added.

Logitech produces seven varieties of the Harmony, ranging in price from $140 (Canadian) to $600. Some resemble traditional television remote controls, while others look more like portable GPS devices.

By plugging the devices into a computer through a USB port, users can program the Harmony remotes to control thousands of varieties of consumer electronics.

"Complexity in the living room is increasing," Mr. Arora said. "People used to have four devices, now they have six. They used to have 20 channels, now they have 200."

Unlike traditional remotes, which control the functions of specific devices, the Harmony focuses on the "user experience" and allow users to choose specific activities such as "watch a DVD" or "listen to a CD."

Automatically, the remotes know which components need to be switched on and switched off, and which settings to employ.

For example, a user who wants to watch a movie instead of listen to the radio will simply push the DVD button on the device. The stereo will turn off, the TV and DVD player will turn on, and the amplifier will switch over.

"People don't want to use devices," he said. "They don't want to think about their mouse or their remote. The best devices are ones that provide truly immersive experiences — nothing between the consumer and the content."

The idea is to eliminate the ubiquitous "cheat sheet" that sits on the coffee table in thousands of living rooms and instructs family members how to use the television or stereo — "press the red button on the silver remote, then the green button on the black remote" — when dad is at work, Mr. Arora said.

However, Harmony sales have recently been hurt by the sagging consumer electronics market in the United States, according to John Bright, a senior research analyst with Nashville, TN.-based Avondale Partners.

"The division performed below expectations in North America in this quarter," he said.

"But I think there is quite a bit of optimism regarding the product portfolio looking forward. The company expects it to be the high-growth piece of their business in calendar 2008 and fiscal 2009."

BY THE NUMBERS

The Harmony 1000 is Logitech's most advanced universal remote:

  • 3.5 — The size in inches of its colour screen
  • 15 — The number of components it can control (including lights and appliances)
  • $600 — How much it'll cost you
  • 175,000 — The number of devices with which it is compatible

Join the Discussion:

Sorted by: Oldest first
  • Newest to Oldest
  • Oldest to Newest

Latest Comments