Logitech acquires LifeSize Communications to tap video conferencing market

Logitech’s video business is mainly centered on Webcams for desktops. By acquiring LifeSize Communications, the company that manufactures HD video communications equipment, Logitech is looking forward to expanding its reach to other communication devices, besides personal computers.

"We expect this acquisition to enable Logitech to extend our leadership in video communication beyond the desktop," said Gerald P. Quindlen, Logitech president and chief executive officer. "Together we can make life-like, HD-quality video communication as mainstream and seamless as a telephone, for meeting participants in the boardroom, at their office desk, in a remote-location meeting room, telecommuting from home or on the go with a laptop."

Logitech to emerge a potential contender in video conferencing market.
Logitech is driving innovation in PC navigation, Internet communications, digital music, home-entertainment control, gaming and wireless devices. Its video business, which essentially deals with webcams, bring in roughly $250 million of the company’s $1.9 billion in annual sales.

LifeSize, on the other hand, specializes in high definition video communications products. Most of them are offered at a cost lesser than most other products on the market.

Thus the acquisition will enable Logitech to emerge a potential competitor to Cisco Systems and other players like Polycom, Microsoft, Hewlett-Packard and I.B.M in the video conferencing market.

Further, the company has the potential to tap the market as video conferencing is no more limited to big business houses.

Increasingly, video conferencing has become more accessible as Internet connections are commonplace, video quality has improved, and costs of cameras and displays has drastically reduced.

Future prospects
LifeSize will operate as a separate division in Austin under the leadership of Mr. Malloy as the LifeSize Communications’ chief executive officer.

LifeSize expects approximately $90 million in revenue in 2009, with 2010 revenue expected to grow between 40 percent and 60 percent.

The acquisition, which is expected to close in December, is subject to customary closing conditions, including antitrust approval.