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Logitech founder and chairman Daniel Borel is something of a hero to his employees because, at a time when many technology companies are restructuring and laying off staff, his company is enjoying runaway growth.

Switzerland-based Logitech's profits grew almost 60 per cent in the second half of last year.

Logitech is the world's biggest manufacturer of personal computer peripherals. Its main claim to fame is the mass production of the computer mouse, which still accounts for about half of the company's annual sales.

But while Logitech's origins lie in its mouse business as an original equipment manufacturer, the company today is reaping profits from a huge, upgradable, home market created in the late 1990s.

Users are often reluctant to change their PCs but they are less hesitant to upgrade their peripherals. This is encouraged by Logitech's pricing policy of keeping the price of its products below US$100.

Mr Borel attributes his personal success to being in the right place at the right time - namely, the United States, Europe and China.

As a student in Stanford University and later, when working for a Japanese publishing software developer, Mr Borel became aware of the need for a proper interface between users and PCs.

In 1991, Logitech, which stands for Logiciel Technologique, was launched in the backyard of a Swiss farm, and in 1994 Hewlett-Packard became its first large OEM customer.

The following year, Logitech moved its production from Switzerland to Shanghai, where its early presence helped to promote its products on the mainland.

'Logitech was the first company to obtain a leased line in Suzhou when we moved there', Mr Borel said.

Logitech is Suzhou's largest employer, providing jobs to more than 8,000 people, half of whom work at its manufacturing plant. Its policy is to produce all new products itself, so that it can establish a benchmark before outsourcing to other manufacturers around Suzhou.

Mr Borel said that, despite increasing its range of products, Logitech did not expect to expand its plant in Suzhou but instead would increase its outsourcing partnerships in the city.

To meet demand for its products - more than 90 million produced and sold last year - Logitech has added outsource manufacturing in Hungary and Mexico, both operations being managed by the China office.

Since 1991, Logitech has sold more than 25 million cordless devices. It is also launching products based on the Bluetooth standard but, when it came to keyboard and mouse, the technology did not bring anything to users, Mr Borel said.

'It [Bluetooth] is still too bulky, expensive and power-hungry for these peripherals,' he said, adding that it would take another two or three years before Bluetooth established itself enough to affect the home or office environment.

Mr Borel said Logitech's multicultural approach, taking in the culture of Europe, America and China, was key to its success.

'Globalisation was a natural move to us. We have taken the best of all three worlds,' he explained.

'Financing and technology come from Switzerland. Our market is in the United States, and we borrowed the taste for innovation from them. From China, where our production is, we adopted the pragmatic approach, and the Chinese culture of cost. Our products are a constant compromise between innovation and cost'.

As a result of this pricing policy and the broadening of its product range that goes far beyond the keyboard and mouse, Logitech's retail business accounts for more than 80 per cent of its revenue.

For between US$49 and US$99, consumers can add functionality and cordless freedom to their desktops.

The entry price for one of Logitech's Web cams for instance, is US$79.

Communicating over the 2.4 gigahertz frequency with a range of more than 20 metres, the Quickcam cordless and its accompanying software offer video e-mail, chat, remote monitoring, conferencing and broadcasting as well as photograph and video editing.

'Using this Web cam over Yahoo! messaging, I can watch my son in Palo Alto,' said Mr Borel, whose life is split between the United States and Switzerland.

'Logitech's vision in this fast changing world is to provide the easiest interface between users and the technology,' he said.

'The mouse is only the tip of the iceberg - just as the mouse tops the Chinese horoscope,' Mr Borel said.

In recent years, Logitech has broadened its product range by supplementing its engineering and manufacturing strengths through a combination of strategic acquisitions and partnerships.

It widened its presence in the gaming industry, and is close to becoming the leading manufacturer of consoles.

It has also moved into the telecommunications market, hoping to tap into the huge demand for mobile phone products.

One of Logitech's newest products is a small, blue and grey, cordless headset with a noise-cancelling microphone that fits over the ear.

Mr Borel said Logitech's challenge was to sort out the offers of new products and ideas that landed on his desk and ensure the company made the right choices.



Swiss mouse-maker continues to roar